Mark Cuban accuses former SEC lawyer of bias

Billionaire Mark Cuban entered into a debate with former SEC lawyer John Reed Stark, saying that the regulator “is throwing cryptocurrency under the bus”.

John. I think you are misreading the impact of what the judge said. It’s not related to this suit.

Not all crypto businesses that have tokens or are considering using tokens are large “enterprises”. Which is the assumption, I believe you are making. (Correct me if I’m wrong…

— Mark Cuban (@mcuban) June 14, 2023

On June 14 Stark published a post about the Commission against Binance case. He analyzed the transcript of the latest hearing and shared his view of what was happening. 

The lawyer expressed support for the SEC, noting regulatory failures in the industry. In his view, the court case would help root out “wrongdoers” and enhance transparency.

In response, Cuban said that the former agency official misinterpreted the judge’s words, and SEC chief Gary Gensler is sabotaging the entire crypto market. 

“Such complex legal and financial issues are better resolved through regulation or rulemaking, rather than through litigation, but I do not head the executive branch,” said Judge Amy Jackson during one of the hearings. 

Stark argued that regulators should treat crypto-related companies as “large enterprises”. But the billionaire said the opposite. In his view, most crypto startups are small teams without resources for a “securities lawyer”. 

The discussion turned to the most appropriate regulation of digital assets. The lawyer insisted that cryptocurrencies should not be equated with stocks or pink sheets.

Cuban named Stark’s position biased. He suggested that tokens could be treated the same as other securities, but for that the SEC would need to formulate clearer rules.

The businessman conceded that, like all early internet companies, “90% of blockchain projects” and “99% of tokens” will fail.

“Those who win will change the rules of the game. That’s how technologies work,” he noted.

Cuban also spoke of the “crypto-psychological disorder” — this is his term for irrational aversion to digital assets and blockchain. He also noted the rise of “crypto maximalism” due to excessive PR.   

John Reed Stark predicted a lengthy battle between crypto exchanges and the SEC. He urged clients of trading platforms to “stop using them right away”.