Chamath @ 00:09:43Wrong
governmentmarkets
Following the June 2023 enforcement actions against Binance and Coinbase, the SEC will continue a systematic crackdown on the U.S. crypto sector: first targeting exchanges, then custodial services, then staking services, and ultimately venture firms involved in token-staking schemes, and during this crackdown period the SEC will refuse to approve any crypto ETFs.
And so they're coming down hard, and they're going to go and systematically dismantle the largest actors, and they're going to go through the value chain. So I think the obvious place that they're looking now are the exchanges. They'll look at the custodial services. They will not approve any ETFs. And then eventually I do think it trickles into all of the staking services. And eventually I think it'll touch the venture community and all of those firms and funds that had a huge, robust business in staking these crypto projects in order to get coins like founding coins and then being able to sell them.View on YouTube
Explanation
Key parts of Chamath’s prediction did not come true, even though some short‑term elements were directionally right.
1. ETF freeze claim clearly failed
- On January 10, 2024, the SEC approved 11 spot bitcoin ETFs from major issuers like BlackRock, Fidelity, and others, allowing U.S. investors direct exposure to spot bitcoin via ETFs. (apnews.com)
- On May 23, 2024, the SEC approved rule changes so exchanges could list multiple spot ether ETFs, further expanding crypto ETF access. (cnbc.com)
- By 2025, the SEC had also approved in‑kind creation/redemption mechanisms for all spot bitcoin and ether ETFs, making them even more institutional‑friendly. (coindesk.com)
Chamath predicted the SEC “will not approve any ETFs” during the crackdown; in reality, the agency approved major spot crypto ETFs less than a year after his June 2023 statement. That’s a direct contradiction.
2. “Systematic dismantling” of the whole value chain did not fully happen
- Exchanges & staking: The SEC did intensify enforcement against big exchanges and staking offerings in 2023–24: lawsuits against Coinbase and Binance for operating as unregistered exchanges and offering unregistered staking programs, as well as actions involving Genesis/Gemini, Celsius, Kraken, Nexo, and later Consensys’ MetaMask Staking. (en.wikipedia.org) This matches the early part of his value‑chain narrative (exchanges and staking services).
- Custodial services: The SEC pushed on custody mainly via rules and advisers rather than “systematically dismantling” custodians. It proposed a stricter custody rule in 2023 and brought a 2024 case against Galois Capital for failing to keep fund crypto with a qualified custodian, but by late 2025 it issued a no‑action letter easing the ability of state trust companies to act as crypto custodians. (cnbc.com) This is a mix of pressure and later accommodation, not a linear crackdown down the custody stack.
- Venture firms / staking‑based token deals: There is no evidence the SEC followed through with a targeted campaign against venture funds for their token‑staking schemes or founding‑coin allocations. Instead, venture players like a16z’s crypto arm show up as stakeholders in policy discussions and industry lawsuits challenging the SEC, not as primary enforcement targets over staking economics. (reuters.com)
- Reversal of the crackdown: Under the Trump administration (from early 2025), the SEC created a crypto task force and then dismissed or paused major lawsuits against Coinbase, Binance, Kraken, and others, and issued guidance softening its stance on many staking models. (reuters.com) That is the opposite of a continuing “systematic dismantling” through the entire value chain.
Because (a) the SEC did approve major crypto ETFs and (b) the enforcement campaign did not proceed all the way through custodians and the venture ecosystem—and was partly rolled back in 2025—the overall prediction is best judged wrong, despite being partially accurate about an initial enforcement surge against exchanges and staking services.