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AI has been a ‘net negative’ for crypto: Phemex CEO
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Artificial intelligence has been a "net negative" for the cryptocurrency industry, according to Federico Variola, chief executive of the crypto exchange Phemex. Speaking on Cointelegraph's Chain Reaction, Variola argued that AI has drained capital away from digital assets while simultaneously arming attackers with powerful new tools. "It's difficult to be bullish about AI in crypto," he said in remarks published on September 16, 2026.
The assessment is notable given that Phemex itself announced an AI-focused transformation in February, with plans to embed the technology across product development and internal operations. Variola framed his latest comments as an observation about the broader crypto industry rather than a reversal of his exchange's own strategy. He said he sees limited room for AI to benefit crypto specifically, noting that many of the proposed fixes encourage centralization rather than decentralization.
Variola pointed to two primary pressures. First, he said liquidity has been "significantly diverted" to the AI sector, pulling capital away from crypto markets. Second, he argued that AI has empowered bad actors who exploit protocols through social engineering and vulnerability discovery. "AI has empowered a lot of bad actors that have been exploiting protocols," he said.
His concerns follow a major security incident in July, when attackers drained roughly $116 million in Bitcoin from more than 5,200 addresses affected by a flaw in the Coldcard hardware wallet. The vulnerability is widely believed to have been uncovered through malicious use of AI. Coinkite CEO Rodolfo Novak warned developers at the time that AI-assisted code review can now surface bugs faster than the industry's most seasoned experts.
Variola said small protocol teams will struggle to operate without a massive cybersecurity budget, a dynamic he believes will concentrate power in fewer hands. He also cautioned that AI-driven threats make self-custody and decentralized finance less appealing to retail users, who must now worry about device hacks and social engineering in ways they previously did not.
Not everyone shares that view. CertiK senior blockchain investigator Natalie Newson told Cointelegraph in April that "AI can also be one of the biggest defenses," even as she acknowledged the technology is making attacks more sophisticated.
Despite his overall skepticism, Variola acknowledged practical benefits from AI agents, particularly for portfolio construction and trading decisions. He said he does not expect agents to fully replace human judgment, adding, "At the end of the day, still it will be up to the user to make the final decision."
