Federico Variola, CEO of the crypto exchange Phemex, stated that artificial intelligence has had a net negative impact on the cryptocurrency industry. According to Variola, AI has diverted capital away from the crypto sector and empowered bad actors to exploit protocols more effectively.
The executive noted that rising cybersecurity costs, driven by AI-assisted threats, place significant pressure on smaller development teams. These challenges may force the industry toward greater centralization, potentially making decentralized finance and self-custody less attractive to retail users.
In July, a security flaw in Coldcard hardware wallets led to the loss of approximately $116 million in Bitcoin across more than 5,200 addresses. Industry experts believe this vulnerability was discovered through the malicious use of AI, which can identify bugs faster than human developers.
Despite his skepticism regarding the broader impact of AI, Variola acknowledged some practical utility for AI agents in assisting investors with portfolio management and trading decisions. However, he emphasized that these tools are unlikely to replace human decision-making in trading.
