Mark Cuban, the outspoken owner and occasional cryptocurrency enthusiast of the Dallas Mavericks, has taken to Twitter to express his concerns about the US Securities and Exchange Commission (SEC)’s handling of recent complaints against cryptocurrency exchanges, specifically Coinbase.
He warns that “no one trusts them.” But why not trust the branch of the US government designed to protect investors?
Mark Cuban slams the SEC vs. Coinbase
This week, the Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase, alleging that the cryptocurrency exchange has been trading in unregistered securities, in violation of US securities laws, since “at least 2019.”
The complaint also alleges that Coinbase acted as a broker, exchange agency, and clearing house, a set of functions that traditional financial platforms do not integrate. Further, the commission states that Coinbase has violated US laws with several products, including Prime, Staking, and Wallet.
Longtime cryptocurrency advocate Mark Cuban expressed frustration with the SEC’s approach, noting that the regulator could have laid out a clear plan for compliance, thus avoiding the current legal disputes. Instead, he accuses the SEC of favoring litigation over providing guidance to companies like Coinbase.
“The SEC could have easily gone to them and figured out an exact plan to get them to comply,” Cuban said chirp. “Then if @coinbase or whoever doesn’t comply, they sue whatever legal issues they have. Instead, they do what they told one of my companies to do when we called, read those cases, and have a lawyer figure it out for you.”
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Why you can’t “trust” the US regulator
In his tweets, Cuban further argued that the SEC’s approach was creating a climate of mistrust, with companies afraid to do business with the regulator due to potential legal ramifications. As a result, the current situation may make it difficult for companies to achieve compliance, which ultimately runs counter to the SEC’s mandate to protect investors and maintain fair, orderly, and efficient markets.
Coinbase’s lawsuit came just a day after a similar complaint was filed against Binance, the world’s largest cryptocurrency exchange, and its CEO, Changpeng “CZ” Zhao, reflecting a tight regulatory environment for crypto firms in the United States.
The crackdown led to a slew of repercussions such as the delisting of more than 40 trading pairs from Binance US. The Securities and Exchange Commission (SEC) has been taking shots at several crypto companies after last year’s FTX collapse under the guise of “protecting consumers.” Still, the actions probably put the SEC and its chairman, Gary Gensler, in a hot seat.
Coinbase has begun to backtrack, demanding clearer guidance on compliance from the top US financial regulator. The US Court of Appeals for the Third Circuit ordered a response from the SEC within one week.