Mark Cuban supports Coinbase and urges the CEO Brian Armstrong to go on the offensive against the SEC as he already has some experience fighting the SEC in court as we are reading more in our latest Coinbase news today.
Mark Cuban supports the exchange and thinks Coinbase should be more aggressive when dealing with the agency. His club had a middling offense last season but that doesn’t mean that he believes in standing pat and play defense when it comes to the SEC. The Billionaire entrepreneur and crypto investor urged crypto exchange Coinbase to go on the offensive against the US Securities and Exchange Commission after the agency threatened to sue it over coinbase’s upcoming Lend program. Cuban tweeted to Armstrong:
“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 [sic] leave it to the lawyers. Just the people you don’t want impacting the new technologies. You have to go on the offensive.”
In Coinbase’s telling, the company was taking a collaborative approach and met with regulators for 6 months while trying to get its end product approved but only get blocked by the agency that rules ont eh legality of the product but doesn’t share the reasoning behind the ruling. Coinbase Lend that was first announced back in June has yet to be launched and it is a product that promises USDC stabelcoin holders on Coinbase 4% returns on savings as the exchange plans to expand the program to other currencies. It’s akin to other products from Celsius and BlockFi with offer high-interest yields on certain cryptocurrencies like Etheruem and bitcoin.
Just because BlockFi does it, it doesn’t mean that yield products are in the clear legally. Preston Byrne who is a prominent lawyer in the crypto space argued that the products offering a yield are securities under US law. A few securities regulators agree, BlockFi recieved cease and desist or show cause letters from five states ver its BLockFi Interest Accounts. As per the Coinbase chief Legal Officer Paul Grewal, the SEC issued the company with a Wells notice and informed it that the Commission is planning on suing. That’s counterproductive as Grewal noted:
“Formal guidance from the SEC about how they intend to apply Howey and Reves tests to products like Lend would be a big help to regulating our industry in a responsible way. Instead, last week’s Wells notice tells us that the SEC would rather skip those basic regulatory steps and go right to litigation.”
1/ Some really sketchy behavior coming out of the SEC recently.
— Brian Armstrong (@brian_armstrong) September 8, 2021
Cuban suggested that taking it to court will behoove Coinbase as well as teh rest players in teh crypto sector who long complained that the agency is not proactive enough about explaining its decision making which is a point that the SEC Commissioner Hester Peirce made a while back. Cuban has a history with the SEC as he already won an insider trading case with the regulator.
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