Crypto evangelist Mark Cuban confronts a powerful player
Mark Cuban attack.
The billionaire, who shakes up the pharmaceutical industry by cutting the prices of drugs, also wants to use his influence to promote the cause of another economic sector: the crypto industry, where he is one of the most ardent and well-known investors.
Cuban has invested in several diverse projects, ranging from web 3, the new iteration of the internet, to blockchain companies, non-fungible tokens to the ether cryptocurrency, whose Ethereum platform he supports.
Cuban is a known Ethereum maximalist, meaning he favors the platform over other blockchains. Ethereum has smart contracts, which are computer code that determines the terms of a transaction (loan, trade, etc.) and does not depend on any third party.
Smart contracts are at the center of decentralized finance, or DeFi, the crypto version of classic financial services that does not require intermediaries.
‘Nightmare’
But his optimism in this young industry also comes with risks for the Cuban. He has been sued by retail investors who claim they were defrauded by him and Voyager Digital. Voyager, a crypto platform that offers traditional financial services, recently filed for Chapter 11 bankruptcy as TheStreet has reported.
The Dallas Mavericks, the National Basketball Association franchise Cuban owns, and Voyager Digital signed a five-year contract in October, aimed at promoting cryptocurrencies by making coins more accessible through educational and digital programs.
As part of the partnership, Voyager promised Dallas Mavericks’ fans a $100 reward for trading crypto on Voyager for a limited time if they deposited $100 and traded just $10.
While this legal battle is underway, Cuban is attacking a force that will only grow in influence over the crypto space: the US Securities and Exchange Commission.
The industry is particularly suspicious of the regulatory agency, accusing it of deliberately refusing to adopt clear rules. Federal agency prefers regulation over enforcement, crypto players criticize.
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This was the case last month, for example, when the SEC surprised the industry by announcing that nine cryptocurrencies listed on Coinbase (COIN) the most popular platform in the US, was unregistered securities.
This decision has important consequences because until now tokens, or coins, have not been considered securities. This means that they escape strict authority supervision and are not subject to the same rules for financial transparency and disclosure as, for example, shares in a company. The listing process is also less stringent than that for securities.
At the time, Cuban warned of a regulatory “nightmare” to come.
“Do you think this is bad?” commented the billionaire. “Wait until you see what they come up with for token registration. It’s the nightmare ahead for the crypto industry. How else do you keep thousands of lawyers employed and create reasons to ask for more taxpayer money?” commented the founder.
‘Bright Line Guidelines’
Cuban has just reiterated his criticism of what he believes is the duplicity of the federal agency. He challenges SEC Chairman Gary Gensler to provide clear rules on the financial services the crypto industry offers and submit them for public comment, as often happens when a regulator plans to regulate a sector.
“Since you understand crypto lending/finance, why don’t you just publish clear line guidelines you want to see and open it up for comments?” Cuban wrote on Twitter on August 22.
It all started with a comment from Gensler in The Wall Street Journal where he defends the idea that the SEC treats crypto like the rest of the capital markets.
Gensler decided to promote his view on Twitter with the following message: “There is no reason to treat the crypto market differently than the rest of the capital markets just because it uses a different technology.”
Cuban reacted immediately, pointing out the disconnect between Gensler’s words and the reality on the ground. In addition to the lack of clear rules, he laments the fact that it is difficult to make a simple deal with SEC agents, a criticism he first raised in 2014.
“Come in and talk to who? Set up an appointment how? Are you using Calendly these days?” asked the billionaire.
