Billionaire Mark Cuban warns of upcoming crypto-currency implosion due to Wash Trades

Shark Tank star and Dallas Mavericks NBA team owner Mark Cuban has warned that the next crypto implosion could come from “The discovery and suppression of wash trades.” on centralized exchanges. The billionaire’s comments follow the collapse of crypto-currency exchange FTX, which wiped out billions of dollars in customer funds.

Mark Cuban on the upcoming crypto-currency implosion.

Shark Tank star and Dallas Mavericks NBA team owner Mark Cuban shared his thoughts on the upcoming crypto-currency implosion with The Street, published Friday. The billionaire stated:

I think the next possible implosion is the discovery and removal of wash trades on central exchanges.

“There are supposedly tens of millions of dollars of transactions and liquidity for tokens that are very little used“, Mark Cuban pointed out. “I don’t see how they can be so liquid“.

However, the Shark Tank star admitted: “I have no details to offer to support my guess.“

Wash trading has long been a concern for crypto-currency exchanges trying to inflate their trading volumes. Wash trades are among the manipulative practices banned by the Securities and Exchange Commission (SEC), and regulators around the world are increasingly cracking down on wash trades involving cryptocurrencies.

Kim Grauer, research director at blockchain analytics firm Chainalysis, said in September of last year that wash trading in the crypto space is currently “a legal gray area that we’re all trying to figure out how it should be regulated and what is illegal.“

The crypto industry is also suffering from the aftermath of the collapse of crypto exchange FTX, which filed for bankruptcy in November. FTX’s former CEO, Sam Bankman-Fried (SBF), was charged with several counts of fraud. However, he pleaded not guilty to those charges.

Mark Cuban said in November that if he were Bankman-Fried, he would have “afraid to go to jail for a long time“. He stressed, “It sure looks bad“. The billionaire owner of the Dallas Mavericks previously explained that recent explosions in the crypto space, including the FTX implosion, were “banking explosions“, rather than “cryptographic explosions“.

The Shark Tank star thinks bitcoin is a good investment; he called investors in gold “idiots“. He also revealed that he is investing in crypto because he expects smart contracts “to have a significant impact in creating valuable applications.”