Investor and star of the television show Shark Tank Kevin O’Leary said in an interview with Decrypt that ‘crypto cowboys’ would soon be a thing of the past, as the SEC casts a ‘legal lasso’ over the two largest Bitcoin exchanges — Binance and Coinbase.
In his view, regulator lawsuits against trading platforms will be remembered as a turning point in the industry, which will ultimately help the entire crypto market become ‘more environmentally friendly’.
‘I think, as an industry, we will leave the past behind and find a new future. [Crypto] technologies offer so much, but they have become mired in an unregulated, cowboy environment’, added O’Leary.
On 5 June the SEC filed a lawsuit against Binance and its CEO Changpeng Zhao. The regulator has brought 13 charges, including the sale of unregistered securities.
O’Leary sees a good sign in the strengthening scrutiny from regulators, which the digital asset industry has faced since the collapse of FTX.
According to him, the SEC’s coercive actions are likely to deprive Binance of capital, regardless of what the leadership thinks or asserts.
He noted that the regulator demanded the freezing of Binance US assets. This situation will also pressure the platform, as customers will sooner or later start withdrawing their funds.
The businessman suggested that the lawsuits would also affect the company’s expansion beyond the United States.
‘The truth is that a regulated exchange is far less profitable than an unregulated fraudulent one. … Perhaps you retreat into the shadows and trade only on fraudulent markets, yet slowly, but surely you will find yourself running out of oxygen’, the entrepreneur added.
Coinbase’s legal troubles are ‘a very different story’, says O’Leary. In his view, the second-largest crypto exchange by trading volume has faced a tough battle, but it is not as harsh as Binance.
However, he noted that the company’s decision to go to war with the Commission dampens institutional clients and weighs on its stock price.
‘The idea that you can beat the SEC — an agency with unlimited resources that has made a very targeted attack — is not easy, and it’s not good for investors’, he said.
On 6 June the SEC filed a lawsuit against Coinbase. The regulator also contends that the platform violated securities laws.
Earlier, Cardano founder Charles Hoskinson shared his view on the lawsuits. He says that the SEC’s case against Binance is motivated by political and philosophical disagreement of the agency with the very existence of cryptocurrencies.