Billionaire entrepreneur Mark Cuban has again locked horns with former securities chief John Reed Stark, this time over who was ultimately to blame for FTX’s collapse and the impact on creditors.
During a heated back-and-forth exchange, Cuban argued had the United States Securities and Exchange Commission set “clear regulations,” no one would have lost money from its collapse.
Stark earlier suggested cryptocurrency and stablecoins — including central bank digital currencies — solve no problems and that the crypto industry operates without regulatory oversight, consumer protections and audits, among other things.
You should read up on how Japan deals with regulation. https://t.co/yHCVwZAqvG
When FTX crashed, NO ONE IN FTX JAPAN LOST MONEY.
If the USA/SEC had followed their example by setting clear regulations that required the separation of customer and business funds and clear… https://t.co/Msvn9o9PCU
— Mark Cuban (@mcuban) July 4, 2023
Cuban argued that Japanese regulators — an increasingly Web3 friendly jurisdiction — are an example of a regulator that has done it right.
“When FTX crashed, NO ONE IN FTX JAPAN LOST MONEY,” he said.
Stark — a cryptocurrency skeptic — shot back, saying it “seems a bit of a stretch” to blame the SEC for the collapses of FTX, BlockFi, Celsius, Terra and Voyager, or what he called “dumpster fires.”
While Stark conceded that the SEC isn’t always right, he claimed the regulator saved investors “millions, perhaps even billions” in crypto losses.
The ex-SEC official claimed while the cryptocurrency industry seeks regulatory clarity, whenever rules are promulgated or proposed, “the crypto industry cries foul” and often responds by filing a “flashy legal challenge to its enactment.”
Cuban hit back, explaining the “best way” to prevent cryptocurrency fraud is to implement “brightline investor protection regulations.” He added:
“Anyone who doesn’t register is de-facto in violation, can’t operate and will be shut down. That’s how you protect crypto investors.”
Stark, however, claims that the SEC only charged the likes of Binance, Coinbase, Beaxy and Bittrex months after the regulator made it clear that those firms were not in compliance.
“[These firms] opted to ignore the SEC — and reap profits for as long as possible without registering,” Stark added.
That is worthy of study Mark, thanks.
The laws in Japan require crypto exchanges to register with authorities, to keep customer money separate from their own accounts, to hold at least 95% of customers’ digital assets in a cold wallet and to entrust clients’ holdings of…
— John Reed Stark (@JohnReedStark) July 4, 2023
It is the second time in three weeks that the pair have clashed over how cryptocurrency should be regulated.
On June 11, Cuban called out the SEC for purportedly failing to provide cryptocurrency firms with a clear registration process.
He claimed it’s “near impossible to know” what constitutes security because the SEC’s “Framework for ‘Investment Contract’ Analysis of Digital Assets” document fails to explain how cryptocurrency firms can come into compliance.