AI Lures Capital Away from Crypto, Phemex CEO Warns

Federico Variola, CEO of Phemex, has expressed concerns about the impact of artificial intelligence on the cryptocurrency industry.

He believes that AI has diverted capital away from crypto and is making it easier for hackers to find vulnerabilities in code, forcing small projects to increase their cybersecurity budgets.

This trend is pushing the market towards greater centralization, Variola warned.

The Phemex CEO pointed to recent incidents where AI was used to identify bugs in code, including a $116 million hack of the Coldcard hardware wallet in July that affected over 5,200 addresses.

Variola acknowledged that AI has practical benefits, such as helping investors diversify their portfolios and provide trading advice, but emphasized that it will never fully replace human interaction in crypto trading.