Crypto Twitter witnessed a heated debate this week. Billionaire investor Mark Cuban accused the SEC’s Gary Gensler of throwing crypto under the bus, while a former SEC official defended the regulator.
In a spirited back-and-forth exchange on Twitter with former SEC official John Reed Stark that began on 14 June, Cuban took exception to Stark’s apparent defense of the SEC’s recent lawsuit against crypto exchange giant Binance.
Cuban accused Stark of misinterpreting the implications of the case and accused SEC Chairman Gary Gensler of sabotaging crypto startups with his “regulation through litigation” approach.
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
Stark had previously argued that crypto-related companies should be treated by regulators as “large companies”. Cuban, however, argued that many crypto companies are small and should not be asked to “hire securities lawyers” just to get a foothold in the industry.
Stark also reiterated his support for the SEC’s action against Binance, pointing out that the industry remains largely unregulated and that the move will eliminate “bad actors” and promote transparency.
From there, the debate pivoted to a discussion on how best to regulate cryptocurrencies, with Stark arguing that crypto assets should not be treated like “pink sheets or stocks”.
In contrast, Cuban called Stark’s view biased and suggested that tokens could indeed be treated similarly to other securities and that the SEC should propose clearer guidelines for them.
Mark Cuban is a well-known American entrepreneur and investor. He first became involved with cryptocurrencies in 2017 when he declared that Bitcoin (BTC) was nothing more than a pyramid scheme. Over time, Cuban has increased his support for digital assets and now appears to be committed to the industry.
Now we are talking tech. You are in my space John. I don’t comment. I do. My entire career has been people telling me why the companies I started were ridiculous and not needed. Until they found themselves using them.
Smart contracts are about 6 years old. Maybe the name… https://t.co/da2zEvjtHU
— Mark Cuban (@mcuban) June 15, 2023
John Reed Stark was previously head of the SEC’s Office of Internet Enforcement. Currently a moderate sceptic of cryptocurrencies, Stark offers a wide range of legal commentary on digital assets to his 21,000 followers on Twitter.
Ultimately, Cuban acknowledged that just like all early internet companies, “90 percent of blockchain companies” and “99 percent of tokens” will go bust. Those that emerge victorious “will change the game. That’s the way technology works,” he said.
Cuban concluded with words of support for crypto, saying that no one can refute the potential impact of crypto on the economy.
He said that “crypto derangement syndrome” – his term for an irrational hatred of cryptocurrencies – would have the same negative effect as those who overestimate its potential.
“With all due respect, Crypto Derangement Syndrome is just as big a problem as the crypto maxis over hyping crypto.”