Mark Cuban, who amassed a considerable fortune as one of the top tech investors coming out of the internet boom, now believes cryptocurrencies are in a position similar to the web in the late 1990s.
Unsurprisingly, he is an avid investor in the asset class. He owns a number of cryptocurrencies like Bitcoin (BTC 0.12%), Ethereum (ETH 1.11%)and even the popular meme coin Dogecoin (DOGE 2.69%). He also has stakes in some of the top crypto companies like non-fungible (NFT) marketplaces OpenSea and SuperRare, Ethereum Layer 2 solution Polygon (MATIC -0.10%) and many more up-and-coming players.
Given his experience in the tech sector over the past four decades and his enthusiasm for crypto’s future, Cuban has become a prominent figurehead for the sector as a whole.
While he is optimistic about what blockchain technology and cryptocurrencies have to offer over the long term, there is one aspect of crypto’s development that he finds deeply frustrating: looming regulation.
A new sheriff in town
One of the most prominent figures in the potential regulatory landscape is head of the Security and Exchange Commission (SEC), Gary Gensler. He believes most cryptocurrencies fall within his jurisdiction. Cuban isn’t happy about it.
There is plenty of debate among government officials, agency directors, and executives of private corporations about what agency should oversee crypto regulation, yet this dialogue might be finally giving way to a definitive course of action.
In an op-ed last month in the Wall Street Journal, Gensler reiterated that he and his agency are focused on one thing: investor protection. He wrote that “there’s 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 op-ed. Cuban seemed to take this as an invitation to share his two cents — and the billionaire didn’t mince words.
In his response on Twitter, Cuban blasted Gensler by questioning if the SEC was actually interested in working on behalf of investors, and whether the agency would ever “make it easy for questions from investors and business people to be asked and answered.” He continued by saying that it’s almost impossible for the average person to open up that dialogue, and that those who can’t afford lawyers “can only guess” when it comes to cryptocurrency regulation.
Cuban believes that the SEC’s claim to “put investor safety first” has yet to be realized. Despite Gensler’s assertion, there has been little concrete action taken by the agency. And that lack of specificity is almost making matters worse as investors look for some kind of guidance.
This recent dialogue between Cuban and Gensler isn’t the first time the billionaire has expressed his dissatisfaction with would-be regulators. On the heels of the news that the SEC would be investigating Coinbase for listing unregistered securities back in July, Cuban said that this may only be the beginning of the SEC making its impact felt on the crypto economy.
On Twitter again, Cuban commented on a post related to the Coinbase investigation saying, “Think this is bad? Wait until you see what they come up with for registration of tokens.” What Cuban is referring to is the possibility that the SEC requires tokens to register as securities, just as it does stocks. That would mean a filing of reports from a token’s developers on a periodic basis.
Cuban pointedly summed up his feelings by saying, “That’s the nightmare that’s waiting for the crypto industry.”
The possible path to regulation
For now, all we can do is speculate on the future course of action that the US government might take when it comes to regulating cryptocurrencies. Despite Gensler repeatedly claiming that his ultimate goal is to provide investor protection in the crypto market, there doesn’t seem to be any rush on his end.
However, there is one positive out of all this. Because of their decentralized nature, most cryptocurrencies present regulators with a tough job trying to enforce rules. For this reason, we could expect cryptocurrencies to continue to operate just as they have over the last decade and for decades to come, but 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.