Billionaire celebrity investor Mark Cuban thinks the U.S. Securities and Exchange Commission (SEC) lawsuit against Coinbase highlights “the fundamental problem” with the regulator.
The Dallas Mavericks owner says the SEC could have “easily” gone to Coinbase and outlined a plan to help the top US crypto exchange become compliant with securities laws.
“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.’
That’s the fundamental problem of the SEC. They don’t want to help companies get to compliance, they want to challenge them to get to compliance.
They are full of lawyers. Lawyers want to litigate. If you had business people, more like the [Small Business Administration], there would be more compliance, fewer lawsuits and better investor education and protections. But if that happened, 2,000 SEC lawyers would be out of a job.”
Cuban argues that there are “thousands of financial scams every minute on Twitter” that the SEC doesn’t do anything about. The Shark Tank star also questions whether the regulator is doing enough to protect investors from pink-sheet stocks that trade over the counter (OTC).
Crypto prices crashed across the board on Monday after news broke that the SEC launched a lawsuit against top global crypto exchange Binance and its CEO Changpeng Zhao. The regulator alleges the exchange violated investor protection and securities laws.
The SEC followed up the Binance lawsuit by suing Coinbase on Tuesday, alleging the exchange operated as an unregistered securities exchange, broker, and clearing agency.
Cuban also argues that the SEC would be able to better protect investors from bad actors if the regulator fostered stronger connections with companies that wanted to be compliant.
“As it is, no one wants to talk to the SEC because no one trusts them for fear of being in the same situation as Coinbase finds itself. You get what you measure.”
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