Mark Cuban, an American businessman, philanthropist, and television personality, has criticized the United States Securities and Exchange Commission (SEC) for providing misleading guidance on which digital currencies could be categorized as securities. The SEC has received criticism for its unfriendly attitude towards the cryptocurrency industry, having recently filed lawsuits against two of the largest exchanges – Binance and Coinbase. The agency also claimed that some leading digital assets, including BNB, SOL, ADA, and MATIC, operate as unregistered securities.
Cuban’s Criticism of the SEC’s Inadequate Supervision of the Crypto Sector
Cuban believes that the SEC has not done enough to properly supervise the cryptocurrency sector and determine which tokens classify as securities and which as commodities. In a recent Twitter post, he claimed that the watchdog’s public statements on the matter differ from the official position on its website. Cuban added that the lengthy guidance does not give information regarding “what is or is not a security in the crypto universe.” He further stated that one would not be able to find out the status of the different digital currencies even with “an army of securities lawyers.”
Cuban thinks that the SEC has double standards when speaking of crypto and other aspects of finance. He said that the Gary Gensler-spearheaded agency had called the stock loan industry “opaque” and required additional transparency. Unlike the digital asset sector, however, it did not categorize “stock loans” securities and did not file lawsuits against brokers or banks. Cuban concluded that the SEC should do the same thing with crypto as an effort to determine which aspects of crypto are securities and which are not and the best way to regulate the industry and protect investors. He thinks that the SEC’s difference in approach is emblematic of its intent for one industry versus another.
The SEC’s Harsh Actions Against Binance and Coinbase
The agency’s unfriendly attitude towards the industry intensified last week when it sued the world’s largest cryptocurrency exchange – Binance, the CEO – Changpeng Zhao (CZ), and the American subsidiary of the company – Binance.US. The main accusation is that the platform operated “unregistered national securities exchanges, broker-dealers, and clearing agencies.” According to the regulator, Binance’s unlicensed products include certain lending offerings, a staking program, the native token BNB, and a fiat-backed stablecoin BUSD.
The SEC continued with its harsh actions with another lawsuit against Coinbase a day later. It alleged that the latter served as a broker, national securities exchange, and clearing agency without obtaining the necessary authorization. It also claimed that well-known cryptocurrencies such as Solana (SOL), Cardano (ADA), and Polygon (MATIC) are securities, accusing Coinbase of offering trading services with them.
Binance’s and Coinbase’s Response to the Accusations
Binance’s CEO – Changpeng Zhao – and Coinbase’s – Brian Armstrong – remained unfazed by the accusations. The former tweeted his signature number – “4,” urging his followers not to trust fake news or any sort of misleading information. For his part, Armstrong said his exchange would be “proud” to represent the crypto sector in its SEC court battle, assuring “we will get the job done.”
Mark Cuban has criticized the SEC’s misleading guidance on cryptocurrency securities and its inadequate supervision of the crypto sector. The SEC’s recent actions against Binance and Coinbase have intensified its unfriendly attitude towards the industry, accusing the two exchanges of operating as unregistered national securities exchanges, broker-dealers, and clearing agencies. Despite the accusations, Binance’s and Coinbase’s CEOs have remained unfazed and have vowed to represent the crypto sector in their SEC court battles.