Mark Cuban Criticizes SEC on How it is Handling Crypto Market
Mark Cuban, a billionaire investor, has criticized Gary Gensler, the United States Securities and Exchange Commission (SEC) chair for the agency’s unclear regulations. Cuban claims that the regulations make it “near impossible” for crypto investors and businesspeople to get clarity from the regulator. Gensler has denied Cuban’s claims.
Cuban responded to Gensler’s recent opinion piece in the Wall Street Journal. In that piece, the head of the SEC once again emphasized the need to protect investors. In the opinion piece, Gensler stated, “there’s no reason to treat the crypto market differently from the rest of the capital markets just because it employs a different technology.” Gensler’s statement was made in reference to the fact that there is no justification for such a distinction.
“The SEC will act in the capacity of a patrol officer. We need to ensure that investor safeguards come standard in the cryptocurrency market, just like seat belts are common in automobiles,” Gensler continued.
Cuban, on the other hand, questioned the specific means by which investors and cryptocurrency firms are expected to engage with the SEC.
Come on in and have a chat with who? How will you set up the appointment? Are you making use of Calendly at the moment? Cuban tweeted in response to Gensler’s post, “Since you understand crypto lending/finances, why don’t you just publish bright line standards you would like to see and open it up for comments?” Gensler had asked Cuban to write the parameters he wanted to see.
Come in and talk to who ? Set up an appointment how ? You using Calendly these days ? Since you understand crypto lending/finances, why don't you just publish bright line guidelines you would like to see and open it up for comments ? https://t.co/N3KQAnutl9
— Mark Cuban (@mcuban) August 22, 2022
In recent years, the 63-year-old star of Shark Tank and owner of the NBA team, the Dallas Mavericks, has been quite active in the cryptocurrency industry, aggressively investing in projects such as OpenSea, CryptoSlam, and SuperRare. His portfolio currently includes these and other cryptocurrencies.
The situation with BlockFi
Gensler referenced the case of the cryptocurrency lending platform BlockFi in his opinion piece. In February, BlockFi reached a settlement with the SEC and other federal and state securities regulators, agreeing to pay $100 million to resolve the investigations.
In reference to BlockFi’s high-yield interest accounts and the company’s practice of loaning out the borrowed cryptocurrency assets at higher rates, Gensler stated that “the issue was what it did with the borrowed assets and what it didn’t do as a firm: provide the required disclosures to investors.” Gensler was referring to the fact that BlockFi had high-yield interest accounts.
According to Gensler, the SEC considers those high-yield interest accounts to be securities; however, BlockFi did not register them as securities with the SEC.
“To our good fortune, there is a way to move forward. I strongly encourage platforms who offer cryptocurrency lending to visit the SEC and speak with employees there. Investors as well as the market for cryptocurrencies will gain if these platforms are brought into compliance with the securities regulations, Gensler continued.
On Monday, the chair of the Securities and Exchange Commission (SEC) stated on Twitter earlier in the day that the agency’s “rigorous enforcement regime… is about following the facts and the law, wherever they may lead, on behalf of investors and working families.”
If you were working on behalf of investors, you would make it simple for entrepreneurs and investors to ask questions and receive answers to those queries. You make it very difficult to accomplish. “Those who cannot afford lawyers are left with no choice but to speculate,” Cuban stated in response to Gensler’s statement.
This is such Bullshit. You didn't start the BS, pls don't continue it. If you were working on behalf of investors you make it easy for questions by investors and businesspeople to be asked and answered. You make it near impossible. Those can't afford lawyers can only guess. https://t.co/CV7WC5ZmDx
— Mark Cuban (@mcuban) August 23, 2021
Cuban has already voiced his disapproval of the way the SEC treats cryptocurrencies, so this is not the first time he is doing so.
Last month, following the agency’s claims that at least nine cryptocurrencies considered unregistered securities were being traded on the cryptocurrency exchange Coinbase, Cuban said that if someone thought that was a bad move in and of itself, they should wait to see what the SEC will come up with for registration of tokens. This was in response to the agency’s claims that at least nine cryptocurrencies were being traded on the exchange.
“That is the nightmare that is in store for the cryptocurrency business. Other than that, how are you going to keep thousands of lawyers employed and come up with reasons to beg for more money from the taxpayers?”