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- 1 Mark Cuban, a renowned investor, slams the U.S. SEC for taking a wrong approach for crypto regulation.
- 2 Cuban blames SEC’s unclear regulatory outlook for the losses investors had suffered during the FTX collapse.
The legal war U.S. financial regulators have launched against the crypto industry has garnered extreme criticism from crypto aficionados. Mark Cuban, a billionaire investor, recently voiced his disapproval against the USA’s regulatory approach towards crypto. In a tweet shared on July 4, 2023, Tuesday, Cuban slammed the U.S. Securities and Exchange Commission (SEC) for taking the wrong course to regulate the crypto industry.
“The SEC is not infallible. It makes mistakes,” he emphasized. Cuban argued that if the SEC had followed a clear regulatory outlook similar to Japan’s, no one in the U.S. would have lost billions when the FTX exchange crashed.
Cuban shared this criticizing post while engaging in a Twitter exchange with the former SEC official, John Reed Stark. In a series of tweets, Stark expressed concern regarding the central bank digital currencies (CBDC) and cryptocurrencies. While Cuban stressed that crypto firms require more clarity from the SEC, Stark contended these systems are riskier and less regulated than the traditional financial ecosystem.
You should read up on how Japan deals with regulation. https://t.co/yHCVwZAqvG
— Mark Cuban (@mcuban) July 4, 2023
When FTX crashed, NO ONE IN FTX JAPAN LOST MONEY.
If the USA/SEC had followed their example by setting clear regulations that required the separation of customer and business funds and clear… https://t.co/Msvn9o9PCU
Mark Cuban Criticizes SEC for its Crypto Regulations
Mark Cuban is a famous Shark Tank personality and also the proprietor of the renowned National Basketball Team, Dallas Mavericks. As an ardent crypto supporter, Cuban has been very vocal about the erroneous way the SEC has been overseeing the crypto sector.
The U.S. SEC and its chairman, Gary Gensler has recently filed strict lawsuits against various leading crypto projects, including Coinbase. However, its enforcement-focused approach has met with widespread criticism.
Commenting on this, Cuban stated it is the SEC that has chosen to “litigate to regulate.” He further added, “You need to face the fact of the matter that crypto is one more technology that will succeed or bail based on its merits.”
In a tweet shared last month, the billionaire investor claimed that the SEC’s registration process lacks clarity. With a list of screenshots, Cuban indicated discrepancies between the Howey Test framework on SEC’s official website and its public statements on crypto regulations. He argued, owing to the ambiguous regulatory framework, it is near impossible to know which crypto tokens can be recognized as securities.
This is an SEC WEB PAGE about the howey test and tokens that often conflicts with what @SEC_Enforcement has said publicly. It's worth a read to get more clarity on what may or may not be a security https://t.co/m5E9V0Pd18
— Mark Cuban (@mcuban) June 11, 2023
Unfortunately none of the elements presented in this… https://t.co/iZ9Gn5SADK pic.twitter.com/kGHgsZkOaH
Similarly to Cuban, several crypto proponents have also been urging the agency to provide crypto firms with a clear rulebook. However, chairman Gensler has affirmed repeatedly that the current regulatory framework is already clear and adequate. Addressing the stance of Gensler, Cuban said, “It was arrogant in thinking that its framework covered every possible situation.”
Contrasting Crypto Regulatory Approaches: Japan vs. U.S.
While the U.S. and other nations have been skeptical about crypto’s future, Japan has welcomed crypto and Web3 with open arms. The Shark Tank star also drew attention to the divergent perspectives of the US SEC and Japan’s lawmakers on crypto regulation.
Cuban highlighted the difference by referencing the collapse of the U.S. FTX exchange. He emphasized, “When FTX crashed, no one in FTX Japan lost money.” The billionaire investor further stressed, “if the USA/SEC had followed their example by setting clear regulations that required the separation of customer and business funds and clear wallet requirements, no one here would have lost money on FTX.”
Japanese lawmakers have been taking prudent steps to expedite the adoption of crypto in their country. By making clear policies and guidelines for various digital assets, Japan is making it easier for crypto exchanges to register their tokens.
While chairman Gensler demanded crypto firms to register with the agency, investors like Coinbase’s CEO, Brian Armstrong, said otherwise. Armstrong recently mentioned in a tweet last month, “there is no path to come and register” and that his exchange has tried repeatedly to do so.
On the same note, Cuban elaborated his viewpoint by stating, “In Japan, they were very loud in saying the obvious, that FTX wasn’t a crypto issue, it was a fraud issue.” He also noted that establishing clear investor protection regulations, like Japan, is an effective method to prevent crypto frauds.
As per Cuban, these regulations should describe the necessary protections and make registration mandatory to ensure compliance. Furthermore, he emphasized, “anyone who doesn’t register is de-facto in violation, can’t operate and will be shut down.” Cuban concluded his tweet with a solid remark, “That’s how you protect crypto investors. The SEC has it wrong.”
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
