Here’s what one of the world’s smartest investors thinks about crypto right now

Mark Cuban, who amassed a significant fortune as one of the best technology investors to come out of the internet boom, now believes cryptocurrencies are in a position similar to the web in the late 1990s.

Not surprisingly, he is a keen investor in the asset class. He owns a number of cryptocurrencies such as Bitcoin (BTC -0.60%), Ethereum (ETH 1.64%)and even the popular meme coin Dogecoin (DOGE 2.69%). He also has stakes in some of the top crypto companies such as non-fungible (NFT) marketplace OpenSea and SuperRare, Ethereum Layer 2 solution Polygon (MATIC -0.71%) and many more upcoming players.

Given his experience in the technology sector over the past four decades and his enthusiasm for crypto’s future, Cuban has become a prominent figurehead for the sector as a whole.

While he is optimistic about what blockchain technology and cryptocurrencies have to offer in the long term, there is one aspect of crypto’s evolution that he finds deeply frustrating: looming regulation.

A new sheriff in town

One of the most prominent figures in the potential regulatory landscape is Securities and Exchange Commission (SEC) Chairman Gary Gensler. He believes most cryptocurrencies fall within his jurisdiction. Cuban is not happy about that.

There is plenty of debate among government officials, agency directors, and private company executives about which agency should oversee crypto regulation, but this dialogue may ultimately give way to final action.

In an op-ed last month in The Wall Street Journal, Gensler reiterated that he and his agency are focused on one thing: investor protection. He wrote that “there is no reason to treat the crypto market differently than the rest of the capital markets just because it uses a different technology.”

Gensler took to Twitter to promote the op-ed. Cuban seemed to take this as an invitation to share his two cents – and the billionaire didn’t mince words.

In his answer to Twitter, Cuban blasted Gensler by asking whether the SEC was actually interested in working on behalf of investors, and whether the agency would ever “make it easy for questions from investors and business people to be asked and answered.” He went on to say that it’s nearly impossible for the average person to open that dialogue, and that those who can’t afford lawyers “can only guess” when it comes to cryptocurrency regulation.

Cuban believes that the SEC’s requirement to “put investor safety first” has not yet been realized. Despite Gensler’s claim, there has been little concrete action from the agency. And that lack of specificity almost makes matters worse as investors look for some sort of guidance.

This recent dialogue between Cuban and Gensler is not the first time the billionaire has expressed his displeasure with upcoming regulators. On the heels of news that the SEC would be investigating Coinbase for listing unregistered securities back in July, Cuban said this may just be the beginning of the SEC getting its grip on the crypto economy.

Taking to Twitter again, Cuban commented on a post related to the Coinbase investigation, saying, “Think this is bad? Wait till you see what they come up with for token registration.” What Cuban is referring to is the possibility of the SEC requiring tokens to be registered as securities, just like stocks. It will mean the submission of reports from the developers of a token at regular intervals.

Cuban summed up his sentiments by saying, “It’s the nightmare that awaits the crypto industry.”

The possible path to regulation

For now, all we can do is speculate on the future action that the US government may take regarding cryptocurrency regulation. Despite Gensler repeatedly claiming that his ultimate goal is to provide investor protection in the crypto market, there appears to be no rush to the end.

However, there is one positive out of all this. Due to their decentralized nature, most cryptocurrencies give regulators a tough job trying to enforce rules. For this reason, we can expect cryptocurrencies to continue to function exactly as they have for the past decade and for decades to come, but with some minor adjustments.