AI has been a 'net negative' for crypto, Phemex CEO says
Capital that once tracked toward digital assets has been diverted by the artificial intelligence boom, Phemex chief executive Federico Variola said, and the damage goes beyond fund flows. Variola argued that AI is also empowering attackers, and that the resulting rise in cybersecurity costs could push the crypto industry toward greater centralization.
Key takeaways
- Phemex CEO Federico Variola said AI has been a 'net negative' for crypto, diverting speculative capital away from digital assets toward the AI boom.
- Variola argued AI is giving cyberattackers a better toolkit, driving up defensive security costs across the crypto industry.
- Rising security costs fall unevenly, and Variola warned they could force smaller operators out and push the market toward greater centralization.
- Variola did not attach specific figures to either the capital-diversion drag or the cost increase, leaving the centralization thesis qualitative for now.
- The article says filings and industry reporting with hard numbers to test the centralization thesis have not yet appeared.
Capital that once tracked toward digital assets has been diverted by the artificial intelligence boom, Phemex chief executive Federico Variola said, and the damage goes beyond fund flows. Variola argued that AI is also empowering attackers, and that the resulting rise in cybersecurity costs could push the crypto industry toward greater centralization.
The capital diversion argument is the blunter claim. Speculative money has a finite supply at any given moment, and when the AI trade dominates headlines and venture pipelines, crypto competes for a smaller share of that pool. Variola did not attach a figure to the drag, but the framing is consistent with a cycle in which on-chain inflows have had to fight for attention against a technology narrative that has largely outrun them.
Cybersecurity costs and the centralization risk
The second thread is the one with longer structural implications. Variola said AI is giving attackers a better toolkit. That, in his view, is pushing up defensive costs across the industry. Those costs do not land evenly: a large exchange with institutional backing can absorb a higher security budget, but a smaller operator running on thin margins cannot. The concern Variola names is that sustained cost pressure forces consolidation, leaving the market concentrated in the hands of platforms large enough to fund serious cyber defenses.
The irony is not subtle. A space built around the principle of distributed ownership and permissionless access could end up more centralized because the technology that was supposed to automate everything also automated the attack surface. Whether that trajectory actually plays out depends on how aggressively the tooling around crypto security catches up with the threat, and on whether smaller operators find cost-sharing arrangements before the pressure becomes terminal.
What to watch is exchange-level security disclosure and any industry reporting that puts hard numbers on the cost increase Variola is describing. The centralization thesis is qualitative for now. The filings that would test it have not yet appeared.
Related reading
Filed by the digital assets desk of MarketPR on September 16, 2026. Source: cointelegraph.com. Indicative figures are not investment advice.