Mark Cuban, the ever-vocal billionaire investor, has lashed out at the Securities and Exchange Commission (SEC) for its recent lawsuit against cryptocurrency giant Coinbase. Cuban contends that the regulator, rather than fostering compliance, has chosen the path of litigation – a move he sees as detrimental to trust within the industry.
In a fiery Twitter post, Cuban labeled the “fundamental problem” with the SEC as their disinclination to aid companies in achieving compliance. He wrote, “They don’t want to help companies get to compliance they want to challenge them to get to compliance,” suggesting that the agency is steeped in a litigation-first culture because “lawyers want to litigate.”
His comments came on the back of the SEC’s decision to launch lawsuits against Coinbase, and subsequently, Binance and its CEO, Changpeng Zhao. These lawsuits allege that both companies are operating illegally in the US – charges that insiders have labeled as “existential” threats to both firms’ operations.
The lawsuits are consistent with SEC Chair Gary Gensler’s longstanding belief that the majority of cryptocurrencies are securities. This perspective has fueled his stance over the years that the crypto industry needs to fall in line with established regulations.
But Cuban didn’t stop there. He went on to assert that the SEC’s current approach to gauging success – based on the number of cases it initiates and wins – is flawed. Instead, he argued, the agency should focus on how many companies it has assisted in achieving compliance. Such a metric, Cuban believes, would be more impactful for investor protection and weeding out unsavoury practices.
However, the current climate of distrust is one that Cuban sees as a significant obstacle. He highlighted this issue in his post, writing, “As it is, no one wants to talk to the SEC because no one trusts them for fear of being in the same situation as @coinbase finds itself.”
The future of crypto, investor trust, and the role of regulators like the SEC is in the spotlight now more than ever. As the situation evolves, one thing is for certain: eyes will be on both Coinbase and the SEC, awaiting their next move.