Billionaire Mark Cuban calls on Coinbase to “counterattack” the SEC
In a tweet today, billionaire entrepreneur and investor Mark Cuban called on Coinbase to initiate a “counterattack” to the US Securities and Exchange Commission after it threatened to sue its loan program.
Billionaire Mark Cuban
Cubans did send Coinbase CEO and Founder Brian Armstrong:
“Brian, this is a rule in litigation. You are unable to solve this problem on your own and you are afraid of making mistakes in the process. You leave it to a lawyer. There are people who don’t want to touch new technologies. You have to counterattacks. “
When asked how Coinbase should “counter”, Cuban simply said, “It’s up to them.”
According to Coinbase, the company took a more collaborative approach and met with regulators for half a year to get the loan product approved. However, the agency that regulates product legality did not approve or share the reasons for the judgment, such as: Bitcoin magazine reported yesterday.
First announced in June but still coming out, Coinbase Lend is a product that promises USDC stablecoin holders on Coinbase a 4% return on their savings. The exchange plans to expand the program to other currencies. Lend is similar to BlockFi and Celsius products and offers high returns on certain cryptocurrencies, including Bitcoin and ETH.
Just because BlockFi takes a more aggressive approach than Coinbase doesn’t mean the profitable products are legitimate. Preston Byrne, a prominent lawyer in the crypto space, has Arguments that profitable products are securities under US law (although he also believes the US should change the rules for such peer-to-peer lending platforms). Some stock managers admit this. BlockFi has received cease and desist letters from 5 states for their BlockFi interest accounts.
According to Coinbase’s chief legal officer Paul Grewal, the SEC Wells has issued a notice to the company that the commission was about to sue. It’s backfiring, Grewal To write:
“Official SEC guidance on the application of the Howey and Reves tests to products like Lend will be of great help in regulating our industry responsibly. Instead, Wells’s announcement last week tells us that the SEC would prefer to skip these basic regulatory steps and initiate a lawsuit straight away. “
Cuban suggested, however, that the lawsuit in court could impose obligations on Coinbase and other crypto institutions that have long complained that the agency should explain the decision more proactively – a point SEC Commissioner Hester Peirce also noted.
Cuban has clashed with the SEC repeatedly. In 2013, he won an insider trading lawsuit filed by the agency. Cuban, like most subjects, refuses to mediate enforcement actions by the SEC. Instead, he accepted to stand trial and spent $ 12 million before being exonerated by a jury.
Marc Steinberg, professor of law at Southern Methodist University and former SEC law enforcement attorney who defended Cubans, Arguments that the agency relied on upholding or ignoring legal precedents in an attempt to force Cubans into submission.
Coinbase, the largest exchange in the United States, has plenty of resources to battle the SEC and Armstong in one thread tweets that it could happen, but he didn’t want to go that route.
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