Outspoken Dallas Mavericks owner and occasional crypto enthusiast Mark Cuban has taken to Twitter to express his concerns over the US Securities and Exchange Commission’s (SEC) handling of recent complaints against cryptocurrency exchanges, specifically Coinbase.
He warns that “no one trusts them.” But why not trust a branch of the US government that is designed to protect investors?
Mark Cuban Slams SEC Versus Coinbase
This week, the SEC filed a lawsuit against Coinbase, alleging the crypto exchange has been trading unregistered securities, violating U.S. securities laws since “at least 2019.”
The complaint also claims Coinbase has been operating as a broker, exchange, and clearing agency, a combination of functions that traditional financial platforms do not merge. Furthermore, the Commission states that Coinbase has violated US laws with several products, including Prime, Staking, and Wallet.
Mark Cuban, a long-time advocate for cryptocurrencies, expressed his frustration with the SEC’s approach, stating that the regulator could have outlined a clear plan for compliance, thereby avoiding the current legal disputes. Instead, he accuses the SEC of preferring litigation over providing guidance to businesses like Coinbase.
“The SEC could have easily have gone to them and outlined an exact plan to get them to compliance,” Cuban tweeted. “Then if @coinbase or whoever didn’t comply, they sue over whatever legal disagreements they have. Instead they do what they told one of my companies to do when we called, read these cases and get a lawyer to 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 fearing to engage with the regulator due to potential legal repercussions. As a result, the current situation could make it harder for companies to achieve compliance, which ultimately goes against the SEC’s mandate of protecting investors and maintaining fair, orderly, and efficient markets.
The Coinbase lawsuit came just a day after a similar complaint was filed against Binance, the world’s largest crypto exchange, and its CEO, Changpeng “CZ” Zhao, reflecting a tightening regulatory environment for crypto companies in the United States.
The crackdown has led to a slew of repercussions such as the delisting of more than 40 trading pairs from Binance US. The SEC has been taking shots at various crypto companies following the collapse of FTX last year under the guise of “protecting consumers.” However, the actions are possibly putting the SEC and its Chair Gary Gensler in the hot seat.
Coinbase has begun to push back, demanding clearer guidance on compliance from the chief US financial regulator. The US Court of Appeals for the Third Circuit has ordered a response from the SEC within one week.