Galaxy Digital CEO is shocked by lack of AI regulation amid crypto scrutiny

Although Mike Novogratz believes that fraudulent players in the crypto industry deserve punishment from regulators, he is appalled by the demonization of entire blockchain technology.

robot in prison cell
Mike Novogratz believes AI can impose an identity threat to humans while there is no attempts to regulate this technology

On March 28, digital asset investment firm Galaxy Digital Holdings Ltd (GLXY) held a shareholder update conference call, when the company's founder and CEO Mike Novogratz, shared with investors his views on the perspectives for cryptocurrencies and, in particular, the recent attack on digital assets by lawmakers and regulators.

Read also: Mike Novogratz predicts Bitcoin at $20k, Ether at $1k

Novogratz supports the government's crackdown on fraudulent crypto companies or those with poorly planned risk management, admitting that such actors have damaged the reputation of cryptocurrencies to the point that "the regulators are fighting back."

"They've cost me money, they cost our investors' money, they've cost me unbelievable headaches, and so I, in some ways, welcome the sweep of the bad actors," the chief executive complained about the problems Galaxy Digital has faced because of such companies.

Still, Novogratz has emphasized that he "does not welcome the idea of throwing the baby out with the bathwater." He considers cryptocurrencies and blockchain technology in general a real breakthrough and "a real alternative way to save money in a world where it feels like the dollar will be debased, or all fiat will be debased."

At the same time, Novogratz cannot understand the lack of regulation of AI, which, according to him, can cause real harm to people, particularly by triggering an identity crisis.

"When I think about AI, it shocks me that we're talking so much about crypto regulation and nothing about AI regulation. I mean, I think the government's got it completely upside-down. In lots of ways, one of the best use cases for crypto is going to be identity around AI, because pretty soon you're going to get a fake Mike Novogratz, hopefully with hair," the GLXY founder stated, adding that "a deep fake world is going to be so much more prevalent" while blockchain technology can be used to prove one's identity.

"It is dumb to think that we should cache this industry because of Sam Bankman-Fried in his Bermuda shorts, period," Novogratz stated.

Read also: Galaxy Digital wins auction to buy crypto custodian GK8 from Celsius

On the same day, Novogratz commented on the Twitter post by Professor Steve Hanke, former senior economist with President Ronald Reagan's Council of Economic Advisers, who warned the social media community against investing in Bitcoin.

"Bitcoin is a highly speculative asset, not a currency. Unreliability, lack of stability, and susceptibility to fraud will continue to plague this cryptocurrency. Don't be tricked, buying Bitcoin is a fool's game," Hanke tweeted.

"Steve, it has outperformed all assets ytd, over 2 years and 3 years on a risk-adjusted weighting (sharpe ratio). It's been safer than JPM and Google. Run the numbers yourself," Novogratz responded to Hanke.