Mark Cuban, who amassed considerable wealth as one of the top tech investors from the internet boom, now believes cryptocurrencies are in a similar position to the internet in the late 1990s.
Unsurprisingly, he’s an avid investor in the asset class. He owns a number of cryptocurrencies such as Bitcoin (BTC -0.60%), ether (ETH 1.64%)and even the popular meme coin Dogecoins (DOGEN 2.69%). He also has stakes in some of the leading crypto companies such as non-fungible (NFT) marketplaces OpenSea and SuperRare, Ethereum Layer 2 solution polygon (MATIK -0.71%) and many more aspiring players.
With experience in the technology sector over the past four decades and enthusiasm for the future of crypto, Cuban has become a prominent figurehead for the entire sector.
While he’s optimistic about what blockchain technology and cryptocurrencies have to offer over the long term, there’s one aspect of crypto development that he’s deeply frustrated with: the threat of regulation.
A new sheriff in town
One of the most prominent figures in the potential regulatory landscape is Security and Exchange Commission (SEC) head Gary Gensler. He believes that most cryptocurrencies fall under his jurisdiction. Cuban is not happy about this.
There is much debate among government officials, agency directors, and executives of private companies about which agency should oversee crypto regulation, but that dialogue may finally give way to a definitive course of action.
In a comment last month in The Wall Street JournalGensler reiterated that he and his agency focus on one thing above all: investor protection. He wrote that “there is no reason to treat the crypto market differently from the rest of the capital markets just because it uses a different technology.”
Gensler took to Twitter to promote the comment. Cuban seemed to take this as an invitation to share his two cents – and the billionaire didn’t mince his words.
In his reply to Twitter, the Cuban blasted Gensler by asking if the SEC was actually interested in working on behalf of investors and if the agency would ever “make it easy to ask and answer questions from investors and business people.” He went on to say that it is almost impossible for the average person to open up this dialogue and that those who cannot afford lawyers are “only guessing” when it comes to cryptocurrency regulation.
Cuban believes the SEC’s claim of “putting investor safety first” has yet to materialize. Despite Gensler’s claim, the agency has taken little concrete action. And that lack of specificity almost makes matters worse, as investors look for some sort of guidance.
This recent dialogue between Cuban and Gensler isn’t the first time the billionaire has expressed dissatisfaction with would-be regulators. Following the news that the SEC would investigate Coinbase in July for listing unregistered securities, Cuban said this may be just the beginning of the SEC’s impact on the crypto economy.
On Twitter, Cuban again commented on a post related to the Coinbase investigation with the words: “Do you think this is bad? Wait until you see what they come up with for token registration.” What Cuban is referring to is the possibility that the SEC will require tokens to be registered as securities, just like stocks. This would mean that regular reports would have to be submitted by the developers of a token.
Cuban summed up his feelings pointedly by saying, “This is the nightmare that awaits the crypto industry.”
The possible path to regulation
For now, we can only speculate about the future course of action of the US government in regulating cryptocurrencies. Although Gensler repeatedly claims that his number one goal is to provide investor protection in the crypto market, there seems to be no rush on his part.
However, there is a positive in all of this. Due to their decentralized nature, most cryptocurrencies present regulators with a tough task when trying to enforce rules. Because of this, we can expect that cryptocurrencies will continue to function as they have for the past decade and decades to come, albeit with some minor adjustments.
RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Polygon, and Twitter. The Motley Fool has a disclosure policy.