Benzinga - Billionaire investor Mark Cuban on Thursday criticized the Securities and Exchange Commission (SEC) and its Chair Gary Gensler for throwing the crypto startups and entrepreneurs "under the bus" without clear guidance.
What Happened: In a series of tweets, Cuban denounced the convoluted rules that startups have to follow, particularly in the web3 space.
He called on the SEC and Congress to create a basic registration system for tokens and exchanges that would enable startups and industry giants alike, while still protecting investors.
John. I think you are misreading the impact of what the judge said. It's not related to this suit.Not all crypto businesses that have tokens or are considering using tokens are large "enterprises". Which is the assumption, I believe you are making. (Correct me if I'm wrong…
— Mark Cuban (@mcuban) June 14, 2023
"I had someone from one of those small companies call the SEC and ask for guidance on getting registered. The response from the SEC was " here are some cases to review , get a lawyer to help you". That is the fundamental problem," said Mark.
Mark added, "When I and others ask for bright line guidance and oppose "regulation via litigation" the businesses I see that are thrown under the bus by the SEC and Gary Gensler, are the dorm room startups that are driven by sweat equity."
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Why It Matters: John Reed Stark, who used to head the SEC's Office of Internet Enforcement, had a differing stance from Cuban's. Stark reposed to Mark saying that regulatory clarity was not an issue and enforcement was how securities regulation worked.
"SEC registration is difficult to say the least but tough financial regulation makes for a safer/more trustworthy marketplace. The crypto verse has just operated in an unregulated space for too long and likes it that way," Stark maintained.
However, Stark agreed with Cuban on the issues of excessive barriers to entry for entrepreneurs that are a result of unreasonable regulation.
Mark, thanks for your respectful and constructive response. You are right, Judge Jackson was likely speaking about crypto-related securities regulation generally. But she was also addressing defense counsel's arguments per their brief about a lack of crypto-regulatory clarity.…— John Reed Stark (@JohnReedStark) June 14, 2023
Earlier last week, the SEC accused Binance and its CEO, Changpeng Zhao, of using Binance.US as a means to evade securities laws, leading to a lawsuit against the exchange. In response, the SEC sought to freeze Binance.US’ assets, including substantial amounts of cryptocurrency and U.S. dollar bank accounts.
Zhao has denied rumors that the cryptocurrency exchange has been selling Bitcoin to prevent the price of Binance Coin from dropping below certain levels.
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