American billionaire Mark Cuban and the former US Securities Exchange Commission official John Reed Stark argued over what actually caused the collapse of FTX and how US customers could have been protected better.
Shark Tank star Mark Cuban suggested in a tweet that had the US SEC adopted similar regulations as Japan, US customers wouldn’t have lost money in the FTX collapse.
Former US SEC official John Reed Stark replied that blaming the SEC in such cases is a “bit of a stretch.”
Stark had earlier tweeted that the crypto-ecosystem, which operates with no regulatory oversight, no consumer protections and no auditing, is not just unsafe and dangerous but also easily susceptible to fraud, grift and chicanery.
Stark also dismissed the creation of CBDCs as useless and risky to global finance.
Mark Cuban praises Japan for correctly regulating crypto
The American billionaire replied to John Reed’s tweet saying he should read how Japan regulates cryptocurrencies.
Cuban pointed out to the former SEC official that when FTX crashed, no one in FTX Japan lost money.
He further suggested that if the SEC had followed Japan’s example by setting clear regulations that required the separation of customer and business funds and clear wallet requirements, no US customer would have lost money in the FTX debacle.
Stak, who is not a fan of cryptocurrencies, replied to Cuban saying that blaming the SEC for FTX, BlockFi, Celsius, Terra and Voyager and other dire crypto-frauds is “a bit of a stretch.”
While admitting that he also has a lot of negative things to say about the SEC, Stark claimed that the financial regulator saved US customers “millions, perhaps even billions” in crypto losses.
Citing SEC’s limited leeway, Stark said the financial regulator’s job is to police an anarchical financial industry with no insurance, regulatory oversight or no insider trading or market manipulation prohibitions. He added:
“That’s a tough row to hoe for a civil enforcement agency with no criminal investigatory or prosecutorial powers.”
“Coinbase, Binance opted to ignore the SEC”
Mark Cuban suggested that asking the companies to register is the worst possible way to stop frauds in any industry. Setting brightline investor protection regulations like Japan is the best way to stop crypto frauds, he added.
John Reed replied that it doesn’t matter what the mandated compliance structure was, FTX would not have complied anyway.
The former official also claimed that companies like Beaxy, Bittrex, Coinbase, Binance, Voyager and others also opted to ignore the SEC — and reap profits for as long as possible without registering.
The ongoing enforcement actions on these companies do not come as a surprise as they had been warned repeatedly by the financial regulator and they still chose to ignore it, he added.
Binance and Coinbase are both facing several charges, including operating as securities exchanges without registering with the SEC.
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