Mark Cuban: Kamala Harris Opposes SEC’s Regulation by Enforcement Approach

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As a seasoned analyst with years of experience in the financial industry, I find the current state of cryptocurrency regulation under Gary Gensler’s leadership at the SEC to be less than ideal. The “regulation through enforcement” approach has created more confusion and uncertainty for the crypto industry, which is seeking clear guidelines for growth and development.

Following the Gary Gensler hearing on Tuesday, tech mogul Mark Cuban has publicly criticized the SEC chief for his enforcement-based regulatory strategy. In a recent tweet, he pointed out that even the team of Vice President Kamala Harris have expressed disapproval of this approach, which Gensler has been implementing for some time now.

Mark Cuban Talks to Kamala Harris Team

Tech magnate Mark Cuban has criticized SEC Chair Gensler following their latest meeting on Tuesday. He mentioned that he’s communicated with the Harris team, who have indicated they will resist “regulation by litigation,” a term used to describe the current US cryptocurrency regulatory strategy. Lately, Kamala Harris pledged to increase investments in the crypto sector and expressed her intention to foster its development if she becomes President.

In simpler terms, Cuban expressed approval of SEC Chair Gary Gensler potentially stepping down, suggesting it could boost economic growth. He stated, “Your departure could add a percentage point to GDP growth.” During Tuesday’s hearing, Gensler acknowledged the mistake in handling the Debt Box case.

I talked to the Harris team today who told me in no uncertain terms that they are against “regulation through litigation “

CYA Gensler.

You leaving is worth a point in GDP growth

— Mark Cuban (@mcuban) September 24, 2024

The U.S. Securities and Exchange Commission (SEC) manages regulation of assets such as cryptocurrencies through an enforcement-based strategy. In other words, they take legal action against people or organizations to set a precedent for their jurisdiction over these markets, rather than creating explicit rules first. However, the crypto industry, which has been advocating for clear regulatory guidelines, has criticized this approach.

Besides Mark Cuban, Representative Tom Emmer also criticized Gensler, referring to him as one of the “most destructive” and “lawless” chairs in history. In a post, Emmer expressed this opinion.

In simpler terms, you’ve coined a new phrase “crypto asset security”, which doesn’t appear in any laws. Furthermore, you haven’t given any clarification or explanation about what this term means within the context of the Securities and Exchange Commission (SEC).

As an analyst, I’d rephrase it as follows: Over the past three years, I’ve observed that the SEC has expanded its interpretation of “crypto asset security” to fuel ongoing enforcement actions. Critics have raised strong concerns about this strategy, with some even predicting potential removal of Gensler from his position as SEC chair.

Is Gensler Misusing Securities Laws to Attack Crypto?

In Tuesday’s hearing featuring Gary Gensler, Representative Ritchie Torres criticized the SEC chairman, suggesting that he was grasping for power by coining the term “digital asset securities”.

He brought an interesting comparison stating that if in-game NFT transactions are subject to securities laws, will the same be applicable to the sale of Yankee tickets? Torres added: “Mr. Gensler is misclassifying collectibles, art, and tickets as securities”. Responding to this, Mark Cuban wrote: “Gensler is gone”.

Gensler is gone

— Mark Cuban (@mcuban) September 24, 2024

Commissioner Hester Peirce of the SEC acknowledged that the regulatory body ought to have conceded earlier that cryptocurrency assets shouldn’t be classified as securities. She explained, “Hidden within a footnote, we now acknowledge that in reality, the token itself is not a security. This is something we should have admitted much sooner.

As a discerning analyst, I concur with Hester Peirce’s sentiments that the Securities and Exchange Commission (SEC) may have inadvertently bestowed preferential treatment upon larger entities like BNY Mellon, potentially enabling them to circumvent the SAB 121 accounting rules.

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2024-09-25 10:35