Billionaire Mark Cuban Criticizes SEC for Throwing Crypto Startups ‘Under the Bus’

Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Last updated:
Ad Disclosure
Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. However, this potential compensation never influences our analysis, opinions, or reviews. Our editorial content is created independently of our marketing partnerships, and our ratings are based solely on our established evaluation criteria. Read More
Freelance Journalist
Freelance Journalist
Andrew Throuvalas
Author Categories
About Author

Andrew is a journalist and content writer with a passion for Bitcoin. His work has been featured with Cryptonews, Decrypt, CryptoPotato, and Bitcoin Magazine, among others.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Ad DisclosureWe believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more
Source: Adobe /  JHVEPhoto

Billionaire tech investor and Shark Tank star Mark Cuban called out the U.S. Securities and Exchange Commission (SEC) earlier this week for throwing crypto startups “under the bus” with its approach to regulating the blockchain industry.

His comments were part of a lengthy debate with former SEC official John Reed Stark – a crypto skeptic who disagrees with the “number one talking point of crypto-enthusiasts” about a “lack of regulatory clarity in the cryptoverse.”

Cuban replied to Stark by citing a specific example of a crypto startup seeking to register with the SEC, which was merely told by the agency to seek out a lawyer for help. He added:

“When I and others ask for bright-line guidance and oppose “regulation via litigation” the businesses I see that are thrown under the bus by the SEC and Gary Gensler are the dorm room start-ups that are driven by sweat equity.”   

Coinbase, Binance, Kraken, and other industry leaders have long criticized the SEC for not providing clear crypto industry guidelines like other jurisdictions. This especially relates to guidance on which crypto assets are securities vs commodities, and how to easily register certain products with the commission, like staking-as-a-service. 

Hester Peirce – a crypto-supportive member of the agency itself – has criticized chairman Gary Gensler on this front. “In the current climate, crypto-related offerings are not making it through the SEC’s registration pipeline,” she wrote in a February statement, shortly after the SEC shutdown Kraken’s unregistered staking service. 

Stark, by contrast, disagreed with Cuban that the industry lacks clarity any more than other areas of the financial sector, claiming it already has “extraordinary regulatory transparency and lucidity.” He continued:

“Whether an investment product acts as a stock token, is priced off of the value of securities and operates like a derivative, is a stable value token backed by securities, or any other virtual product that provides a synthetic exposure to underlying securities, they must all comply with US securities laws.”

Most Crypto Companies Are Doomed

Stark also argued that blockchain crypto has failed to live up to its promises of revolutionizing the financial system, whether as a store of value or speedy payment rail. 

Cuban countered that crypto companies need time to thrive much like the early internet companies – but conceded that the vast majority will likely collapse along the way. 

“90 percent of blockchain companies will go broke,” he said. “99 percent of tokens will go broke. Just like 99 percent of early internet companies did…  but the winners will be game changers. That’s the way tech works. “

Cuban also argued that many of the “risks” critics accuse crypto of carrying are just as common within the legacy banking system, such as “GroupThink” investing:

“You condemn groupthink for crypto users, but what saved depositors of SVB… was GroupThink,” he said. “The Feds knew that if depositors lost money, the contagion, otherwise known as GroupThink removal of deposits would undermine our economy.  So they had to step in.”

More Articles

Industry Talk
$1 Billion USDT Gets Minted on TRON – Will TRX Hit $1?
Tim Hakki
Tim Hakki
2025-02-07 18:10:07
Industry Talk
Trump Meme Coin Hit With Legal Complaint – Is a Total Collapse Coming?
Harvey Hunter
Harvey Hunter
2025-02-07 17:52:52
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors