Mark Cuban, a well-known billionaire entrepreneur, said he thinks the US Securities and Exchange Commission (SEC) will impose “nightmarish” rules on crypto, especially for token registration.
Mark Cuban criticizes the SEC for its future “nightmarish” rules on crypto
In response to a tweet by US Senator Pat Toomey (R-PA), billionaire entrepreneur Mark Cuban, star of Shark Tank and owner of the NBA team Dallas Mavericks, issued his own comment:
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/eoDAiyDxlR https://t.co/mjr9LxnDZB
— Mark Cuban (@mcuban) July 23, 2022
M.C.: “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?”
P.T.: “Yesterday’s enforcement action is the perfect example of the SEC having a clear opinion on how and why certain tokens classify as securities. Yet the SEC failed to disclose their view before launching an enforcement action”.
Basically, Cuban predicts that the US Securities and Exchange Commission (SEC) will unveil rules for token registration that will be “the nightmare that’s waiting for the crypto industry“.
His thoughts come in response to Pat Toomey’s (R-PA) tweet criticizing the securities regulator for its enforcement action against a former Coinbase employee in which nine tokens were identified as securities. Coinbase immediately disputed the allegation of listing cryptocurrency securities
Mark Cuban on the issue of the SEC and token registration
In his tweet, Cuban adds a link to a YouTube video of him trying to submit a no-action letter to the SEC to ensure that a securities purchase he is about to make, does not violate insider trading laws.
According to the billionaire, the nightmare lies in the fact that the registration of tokens is still unclear to the point that investors are given no assurance that they will not violate the law.
On its website, the SEC states the following:
“Most no-action letters describe the request, analyze the particular facts and circumstances involved, discuss applicable laws and rules, and, if the staff grants the request for no action, concludes that the SEC staff would not recommend that the Commission take enforcement action against the requester based on the facts and representations described in the individual’s or entity’s request”.
The Coinbase case
Recently, Bloomberg revealed that Nasdaq-listed crypto-exchange Coinbase is under investigation by the SEC under allegations that it listed digital assets that were required to be registered as securities.
The first crypto to be investigated was Ripple (XRP) itself, but the SEC’s doubts are also moving toward others.
In this regard, Paul Grewal, Chief Legal Officer of Coinbase commented on the news saying that he is confident about the SEC’s rigorous due diligence process that will keep securities off the platform.