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Highlights
- Mark Cuban blasts SEC for stifling crypto innovation, suggests CFTC takeover for clearer regulations.
- SEC's tough stance on crypto token registration pushes businesses to consider markets outside the U.S.
- Cuban warns SEC's current crypto regulatory approach could influence voter sentiment in upcoming elections.
Billionaire investor Mark Cuban has openly condemned the work of the U. S. Securities and Exchange Commission (SEC) regarding crypto regulations, and especially in token releases.
Cuban vented on X detailing problems with the registration process, which is too complicated and killing legitimate crypto businesses. As per Cuban, the SEC’s approach makes compliance nearly impossible for the entrepreneur, thus preventing innovation and pushing companies out of the U. S. market.
Cuban Criticizes SEC’s Regulatory Approach
In a series of X posts, Mark Cuban slammed SEC Chair Gary Gensler and the regulatory body’s current attitude to cryptocurrency regulations. According to Cuban, registering a token release may take hundreds of hours for securities lawyers because of the extensive negotiations required with the SEC, but approval is still unlikely.
The process to register can take a securities lawyers hundreds or more hours to be completed for a simple token release. This is because of all the give and take required with the SEC.
And even then there is a strong likelihood that they won’t give approval.
They have had…
— Mark Cuban (@mcuban) May 11, 2024
He contended that the SEC should streamline the application process to enable any entrepreneur to apply. However, they still need to change the rules but have almost made it impracticable to follow existing ones.
Cuban stated,
“They have had enough experience; they could modify the application process so that any entrepreneur could easily complete the registration process. But they won’t. They know it’s nearly impossible for the process to work as is.”
He also accused the SEC of purposely making a destructive environment for the crypto industry, which makes it nearly impossible for good companies to operate legally. Cuban has also underscored that the high costs and time-consuming nature of the registration process make companies refrain from such attempts, directing them to operate outside the US or avoid the country at all.
Calls for Legislative Action and CFTC Involvement
Cuba’s complaints were directed at the SEC and general regulatory problems faced by the crypto industry in the United States. He had earlier urged Congress to develop legislative measures that would set clear guidelines of regulation specifically designed for the crypto industry.
Cuban proposed that the Commodity Futures Trading Commission (CFTC) should become the body that regulates cryptocurrencies, taking this away from the SEC so that there is better control.
He stressed the rising power of the crypto-voting population, especially among the young and independent people, pointing out that their needs ignored could cause a lot of fuss in the future elections. Cuban cautioned that the current approach taken by the SEC represses innovation and does not protect investors’ interests; thus, it could have wider political implications.
SEC Growing Criticism and Industry Impact
Cuban’s statement is only one of many in a significant surge of criticism from industry advocates that the SEC’s enforcement-by-regulation approach harms the cryptocurrency industry. In the last year, the SEC sued some of the largest cryptocurrency exchanges, including Coinbase, Binance, and Kraken, over the securities status of their listed assets.
Such acts have created huge confusion and arguments in the industry, especially regarding the determinations of the Ethereum (ETH), Cardano (ADA), Solana (SOL), and Polygon (MATIC) types of assets.
Regulatory uncertainty has also influenced the likelihood of Ethereum spot ETF approval, with some industry practitioners questioning the SEC’s readiness to approve such products.
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