American billionaire Mark Cuban gave some advice to Coinbase CEO Brian Armstrong on how to deal with the threat of prosecution from the SEC.
Entrepreneur and cryptocurrency investor Mark Cuban has called on cryptocurrency exchange Coinbase to “go on the offensive” against the US Securities and Exchange Commission (SEC). This week, it became known that the SEC warned Coinbase of a possible legal action if the company launches a high-yield savings product for the USDC stablecoin.
“Brian, this is regulation through litigation,” wrote Cuban tweeted to Coinbase CEO and Founder Brian Armstrong. “They are not able to cope with it on their own and at the same time they are afraid to make mistakes. They leave it to the discretion of the lawyers. These are people who should not influence new technologies. You must go on the offensive. ”
As stated Coinbase, the company has been in contact with the regulator for six months trying to get approval for its product Lend… However, I recently received a sudden warning about possible legal action in the event of a product launch. Coinbase stated that she was ready to fight SEC in court, as the regulator is unable to pursue a consistent policy regarding the regulation of the cryptocurrency industry.
Brian, this is “Regulation via Litigation”. They aren’t capable of working through this themselves and are afraid of making mistakes in doing so. They they leave it to the lawyers. Just the people you don’t want impacting the new technologies. You have to go on the offensive
— Mark Cuban (@mcuban) September 8, 2021
Cuban believes that a lawsuit against the SEC from Coinbase and other cryptocurrency players could set a good precedent for future industry regulation. Cuban himself also has a history of uneasy relations with the SEC. In 2013, he won an insider trading case brought against him by the regulator. Kuban has abandoned an out-of-court settlement – the path followed by most companies that are being sued by the SEC. He took the case to court, spent $ 12 million and won.
Southern Methodist University law professor and former SEC attorney Marc Steinberg, who testified in favor of Cuban, approvesthat the agency relied on disregard for judicial precedent in an attempt to get Cuban to agree to a settlement.