The Shark Tank star, crypto bull and Dallas Mavericks owner Mark Cuban has taken to Twitter to air his opinion on how the crypto sector should be regulated – drawing mixed reviews from the community.
Cuban, who has grown increasingly vocal about all things crypto-related – including dogecoin (DOGE) – in recent months, wrote that while “‘crypto’ is not monolithic,” certain rules needed to be applied.
Here are his five hot takes:
- Stablecoins will be the first to get regulated, as buyers were uncertain as to how “stable” such tokens really are. “It needs standards,” he opined.
- Smart contracts “are the most likely source of fraud,” and “intentional omissions” and “undisclosed actions,” as well as “lack of clarity” could blight their cause. But rather than seek regulatory approval, Cuban noted they would likely be subject to fraud probes and “certified audits” – ruling out “anonymous smart contract” deals. “Proof of authorship and identity could be a thing,” Cuban remarked.
- Tokenomics are “confusing” and “a ripe opportunity for fraud.” Liquidity and authorship checks could address possible issues.
- Anonymity may have to be sacrificed for tokenomics and smart contracts so the “feds and victims will have a person/entity to sue or indict.” Stoically, he mused: “that’s the price that will be paid.”
- Regulation built around existing fraud laws “is not a bad thing,” will not hamper innovation, and will “open the door for more people to confidently use” crypto.
Many chimed in with their responses, with crypto trader ‘cubantobacco’ suggesting that regulators create “a separate whitelist for regulated contracts” and “a regulator standard certification for smart contract auditing companies.” Cuban (Mark, that is), responded by calling the notion a “great idea and tagging the Securities and Exchange Commission (SEC) chief Gary Gensler.
Cuban opined that a similar notion already exists “in the stock market” in the form of the OTC Markets Group-compiled over-the-counter (OTC) securities liquidity gauge Pink Sheets and the Financial Industry Regulatory Authority’s OTC bulletin board quotation service.
The OTC stock market, he complained, is “full of small market cap junk and trade huge volumes for less than USD 0.01 per share.” “If it works in stocks,” he asked, “Why not crypto?”
Others took a very dim view of Cuban’s opinions, with Meltem Demirors, Chief Strategy Officer at CoinShares, quipping acerbically:
“It’s truly incomprehensible to me why y’all simp for this man.”
The Wintermute Trading Founder and CEO Evgeny Gaevoy was no less critical.
But it seems that at least one of Cuban’s forecasts may well hit the mark. Bloomberg reported that the American Treasury was “readying” a stablecoin “clampdown,” having identified “urgent risks.”
The report stated that sources close to the matter were concerned about a lack of “consumer protections”: “Treasury officials are paying special attention to how stablecoin transactions are processed and settled, and whether that changes based on market conditions.”
Meanwhile, the General Counsel at Compound Labs Jake Chervinsky issued a warning on Twitter, where he wrote:
“Reminder: We have two weeks left until the fiscal year ends for the SEC and the [Commodity Futures Trading Commission]. I have no inside knowledge of any impending actions, but won’t be surprised if we see crypto enforcement activity from either or both agencies soon.”