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The bitcoin price fell to under $19,000 per bitcoin late last month before rallying to almost $25,000—only to crash back following a Tesla bombshell. Ethereum has seen even more extreme moves, bouncing between $1,000 per ether and $1,600 as excitement builds over a radical ethereum upgrade.
Now, billionaire investor Mark Cuban has warned the U.S. Securities and Exchange Commission’s (SEC) “regulation-by-enforcement approach” to cryptocurrencies is just the start of a “nightmare that’s waiting for the crypto industry.”
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“Think this is bad? Wait till you see what they come up with for registration of tokens,” Cuban, star of the TV show “Shark Tank” and owner of the Dallas Mavericks, posted to Twitter in response to a complaint by U.S. senator Patrick Toomey that criticized the SEC’s “regulation-by-enforcement approach.”
“That’s the nightmare that’s waiting for the crypto industry. How else do you keep thousands of lawyers employed and create reasons to ask for more taxpayer money,” Cuban asked, linking to a 2014 video of him calling the SEC to get guidence on insider trading rules.
Last week, the SEC filed civil and criminal charges against a former Coinbase
“[This] enforcement action is the perfect example of the SEC having a clear opinion on how and why certain tokens classify as securities,” Toomey said. “Yet the SEC failed to disclose their view before launching an enforcement action.”
Coinbase denied any of the cryptocurrenices are securities, however.
“Seven of the nine assets included in the SEC’s charges are listed on Coinbase’s platform. None of these assets are securities,” Paul Grewal, Coinbase’s chief legal officer, wrote in a blog post. “Coinbase has a rigorous process to analyze and review each digital asset before making it available on our exchange—a process that the SEC itself has reviewed.”
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SEC chairman Gary Gensler has repeatedly branded the crypto market a “Wild West” and called on crypto companies such as Coinbase to “come in and talk to us.”
Coinbase’s latest battle with the SEC comes amid a stock price crash that’s wiped away more than 80% of the company’s value since it made its Nasdaq debut just over a year ago. The bitcoin price has itself dropped by around 70%, dragging down ethereum and other major cryptocurrencies and wiping some $2 trillion from the combined crypto market.
Earlier this month, leaked Coinbase emails revealed the crypto exchange decided to “temporarily shutting down” its U.S. affiliate marketing program—branded a “major red flag” by one investor.