A Shark Tank investor is deeply concerned about how the impending wave of regulation will affect the cryptocurrency space.
In a new post, billionaire Mark Cuban tells his 8.7 million Twitter followers that in light of a recent U.S. Securities and Exchange Commission (SEC) lawsuit alleging insider trading by a Coinbase employee, he anticipates even more compliance and enforcement issues.
“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?”
Cuban includes a link to a 2014 YouTube video he posted demonstrating how he encountered confusing, incomplete and outdated information while trying to interact with the SEC in an attempt to invest in an unnamed company without violating insider trader laws.
Late last week, it was reported that popular US crypto exchange Coinbase alerted authorities about alleged insider trading by one of its employees. Former product manager Ishan Wahi is said to have provided his brother and a friend advance notice about upcoming Coinbase digital asset listings, which enabled them to profit off of the information.
Around that time news also broke that the SEC was scrutinizing Coinbase to determine whether nine of its digital offerings qualified as unregistered securities.
Pennsylvania Republican Senator Pat Toomey also took to Twitter to criticize the SEC’s methods, noting that the agency is classifying certain crypto tokens as securities in legal actions without first establishing clear policies and definitions on paper.
While stating that anyone breaking the law should in fact be punished, Toomey warns,
“The SEC’s regulation-by-enforcement approach to digital assets poses a serious challenge for any well-meaning innovator who’s striving to comply with existing laws and regulations.
Providing regulatory clarity prior to enforcement would benefit regulators and investors alike.”
Mark Cuban has also previously commented on the potential need to apply regulation to stablecoins, which are altcoins designed to be pegged to the value of more stable currencies like the US dollar.
Featured Image: Shutterstock/terng99/Nikelser Kate