Shark Tank star and Dallas Mavericks NBA team owner Mark Cuban has warned that the U.S. Securities and Exchange Commission (SEC) will propose token registration rules that will be “The nightmare ahead for the crypto industry“.
Billionaire Mark Cuban warned in a tweet Saturday about how the SEC will regulate crypto-assets. His warning was in response to a tweet from U.S. Senator Pat Toomey who criticized the SEC for its enforcement action against a former Coinbase employee where nine crypto-currency tokens were identified as securities. Coinbase quickly disputed the allegation that it listed crypto-currencies.
Pat Toomey noted that the enforcement action “is a perfect example of the SEC having a clear opinion on how and why certain tokens classify as securities. Yet the SEC failed to disclose its opinion before launching an enforcement action.“
Mark Cuban, whose fortune is $4.7 billion, thinks the SEC will come up with rules on how to register crypto tokens that will be a “nightmare” for the crypto industry. He replied to Toomey: “You think this is bad? Wait until you see what they propose for token registration. This is the nightmare that awaits the crypto industry“, the billionaire wrote. “How else do you keep thousands of lawyers employed and create reasons to ask for more taxpayer money?“
Think this is bad? Wait till you see what they come up with for registration of tokens. That’s the nightmare that’s waiting for the crypto industry. How else do you keep thousands of lawyers employed and create reasons to ask for more taxpayer money? https://t.co/eoDAiyDxlR https://t.co/mjr9LxnDZB
– Mark Cuban (@mcuban) July 23, 2022
Cuban’s tweet includes a link to an SEC YouTube video in which he is seen attempting to submit a no-action letter to the SEC to ensure that a stock purchase he is about to make will not violate insider trading laws. However, the billionaire demonstrated that the process is very complicated, noting that it does not give investors assurance that they will not violate the law. “What I found even shocked me“, wrote Mark Cuban after going through the process requested by the SEC.
“Most no-action letters describe the claim, analyze the particular facts and circumstances involved, [et] discuss the applicable laws and rules“, the SEC said on its website. If the no-action request is granted, “the SEC staff will not recommend that the Commission take enforcement action against the applicant based on the facts and representations described in the individual or entity’s application.“
Cuban has previously criticized the SEC for taking an enforcement-centric approach to regulating the crypto industry.