Billionaire entrepreneur and owner of the NBA team Dallas Mavericks, Mark Cuban, recently accused Gary Gensler and the Securities and Exchange Commission (SEC) of trying to hinder the developing cryptocurrency industry.
Cuban argues that the SEC's decision to regulate through litigation rather than encouraging compliance creates a hostile environment for new participants. Cuban says:
“They make it impossible to comply with the registration rules. The cost in terms of time and legal fees of trying to register and comply makes it impossible to operate realistically.”
Cuban also explains that the SEC's approach discourages him from investing in companies that plan to issue tokens. Cuban stated:
“If I get an investment opportunity to issue tokens, I say no now. It's not because of the company itself, but because the SEC will not allow the company to operate.”
The entrepreneur also criticizes the SEC for creating a “destructive environment” when the industry could have been improved to increase compliance and protect investors. Cuban believes the cryptocurrency industry is eager to find a way to register and comply and separate legitimate tokens from “junk tokens.”
But Cuban argues that because the SEC's approach makes compliance so expensive and time-consuming, it's difficult for companies to distinguish themselves from less reputable entities. “Junk tokens sit side by side with real companies, and investors have no way of knowing what is junk and what is real,” he says.
*This is not investment advice.