Phemex CEO Says AI Is a Net Negative for the Crypto Industry

Phemex CEO Federico Variola said on Cointelegraph's Chain Reaction program that AI is a "net negative" for the crypto industry. He argued that AI diverts capital away from the crypto sector while also empowering attackers to exploit protocols through social engineering or vulnerability mining, raising cybersecurity costs for smaller teams, and these pressures may push the crypto industry toward greater centralization. Variola said it is hard to be optimistic about AI in the crypto space because many so-called fixes actually encourage more, not less, centralization. He also warned that as AI becomes more prevalent, threats such as device compromise or social engineering increase, making DeFi less appealing to ordinary retail users. However, he acknowledged that AI agents have practical value in helping investors build portfolios or make better trading decisions, but he does not expect AI agents to fully replace human trading decisions. This statement comes against the backdrop of Phemex announcing an AI transformation in February this year, planning to embed AI into product development and internal operations. Additionally, in July this year, attackers exploited a Coldcard hardware wallet vulnerability to steal approximately $116 million in Bitcoin, a flaw widely believed to have been discovered through malicious use of AI; Coinkite CEO Rodolfo Novak warned at the time that AI-assisted code review was uncovering vulnerabilities faster than even the industry's most senior experts. CertiK senior blockchain investigator Natalie Newson noted that AI could also become one of the greatest defensive forces.