Billionaire Mark Cuban warned on Twitter that he faltering sector, whose prices have already been hammered by rising interest rates and recession fears, might face a “nightmare” as a result of tighter SEC oversight.
Mark Cuban, Shark Tank star and investor, has cautioned that the Security and Exchange Commission’s (SEC) upcoming measures to regulate cryptocurrencies will be a nightmare for the sector.
After Senator Patrick Toomey slammed the SEC in a tweet over the weekend, the billionaire “Shark Tank” star and owner of the Dallas Mavericks expressed this sentiment.
The senator said that the SEC took enforcement action without providing any explanation as to why it considers some digital coins to be “securities” comparable to stocks or bonds. A former employee of Coinbase is among the three people accused of illicit insider trading who have recently been the subject of civil and criminal accusations by the agency.
“Yesterday’s enforcement action is the perfect example of the SEC having a clear opinion on how and why certain tokens classify as securities,” said Toomey, ranking member of the Senate Banking Committee. “Yet the SEC failed to disclose their view before launching an enforcement action.”
Today we announced insider trading charges against a former Coinbase product manager, his brother, and his friend for perpetrating a scheme to trade ahead of multiple announcements regarding certain crypto assets that would be made available for trading on the Coinbase platform.
— U.S. Securities and Exchange Commission (@SECGov) July 21, 2022
The SEC claimed in court documents that Coinbase’s exchange traded at least nine cryptocurrencies that were unregistered securities. Toomey thinks it would have been preferable if the SEC had made clear what exactly qualifies a digital asset as a security before charging the accused.
The senator continued by stating that the lack of openness and clarity in the SEC’s operations will make it difficult for investors and entrepreneurs to comply with laws and regulations.
BTC/USD slips back as week opens. Source: TradingView
Mark Cuban responded to the senator’s tweet and said that this was just the beginning of things getting worse for the cryptocurrency sector. He believes that the SEC is only making an argument for increased funding allocation while seeking to keep its lawyers occupied.
“Think this is bad? Wait till you see what they come up with for registration of tokens,” Cuban tweeted in response to Toomey. “That’s the nightmare that’s waiting for the crypto industry. How else do you keep thousands of lawyers employed and create reasons to ask for more taxpayer money?”
Think this is bad? Wait till you see what they come up with for registration of tokens. That’s the nightmare that’s waiting for the crypto industry. How else do you keep thousands of lawyers employed and create reasons to ask for more taxpayer money? https://t.co/eoDAiyDxlRhttps://t.co/mjr9LxnDZB
— Mark Cuban (@mcuban) July 23, 2022
Cuban included a link to a YouTube video that details an inquiry he made to the SEC in 2014 on insider trading rules and the shocking response he received.
Related reading | Mark Cuban On Centering 80% Of His Investments In Cryptocurrencies
These problems, along with the SEC’s ongoing conflict with Ripple over the status of XRP, may indicate that the SEC lacks objectivity in its dealings with the cryptocurrency sector. In fact, Ripple appears to be cruising to victory.
Numerous crypto companies have been urging the SEC and the government to create clear regulatory frameworks for the cryptocurrency and blockchain sector for years. However, it doesn’t appear that the concerned agencies are in a rush to do so.
Of course, this isn’t the first time Mark Cuban has criticized the SEC. SEC charged Mark with insider trading back in 2014. Mark Cuban won in court.
As the federal government considers possible rules for the industry, there is much debate over the idea of requiring the registration of cryptocurrencies as a type of security. The discussion heated up last week when the SEC announced insider trading allegations against Ishan Wahi, a former employee of Coinbase, as well as his brother and a friend.
Related reading | Mark Cuban Reveals His Biggest Crypto Mistake. Here’s How Much He Lost
Featured image from Getty images, chart from TradingView.com
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