Phemex CEO warns AI adoption is a net negative for crypto

Phemex CEO Federico Variola has characterized the impact of artificial intelligence on the cryptocurrency industry as a ‘net negative’ so far. Speaking on Cointelegraph’s Chain Reaction, Variola argued that AI has diverted significant capital and liquidity away from crypto ecosystems toward AI-focused projects.

Variola also highlighted increased security risks, noting that AI empowers malicious actors to discover protocol vulnerabilities and conduct more sophisticated social engineering attacks more quickly. He warned that these rising cybersecurity costs and the speed of exploitation could force the industry toward greater centralization, as smaller protocol teams may lack the massive budgets required to defend against AI-driven threats.

These comments follow Phemex’s own announcement of an AI transformation earlier this year. The skepticism coincides with recent industry incidents, such as a July exploit where attackers reportedly used AI to uncover flaws in hardware wallets, leading to the loss of approximately $116 million in Bitcoin.