Mark Cuban and Grandma Must for SEC Crypto Registration

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It may come as a surprise that the SEC (Securities and Exchange Commission’s) decision to prosecute three people for insider trading in cryptocurrencies has attracted much criticism. According to the story, the former Coinbase employee hinted to his brother and friend which assets would be launched.

Surely cracking down on insider trading is a good thing? It does not matter. However, it is not the traffic itself that is driving the boom in the sector. In its press release on the allegations, the SEC added a sentence that nine of the trio’s 25 traded assets were in fact stocks. The cryptocurrencies involved were not disclosed.

Although many cryptocurrencies are truly stocks, the SEC can sue them for not registering. Cryptocurrencies considered unregistered securities could face hefty fines and thus overcome a number of regulatory hurdles to operate and trade in the United States. For this reason, many cryptocurrency industry insiders, including Shark Tank judge Mark Cuban, are concerned.

Are cryptocurrencies commodities or stocks?

The debate over the definition of cryptocurrency is almost as old as the digital asset industry itself.Currently, most cryptocurrencies in the U.S. are classified as commodities, which means they fall under the jurisdiction of the CFTC (Commodities and Futures Trading Commission) and not abiding by SEC security rules. Securities are regulated by the SEC and there are strict rules on how they can be traded and what information should be disclosed. Many cryptocurrency exchanges are not allowed to trade stocks.

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The SEC is in the midst of a crackdown on Ripple (XRP) cryptocurrency, which it claims operates as unregistered security. Its CEO, Gary Gensler, believes that many existing cryptocurrencies are in the same league, operating as unregistered stocks. However, cryptocurrency officials say the rules are unclear and not properly communicated.

Insiders from the cryptocurrency industry, including the CFTC, have criticized the SEC for adopting rules-based regulations. In essence, this means creating rules following individual cases, rather than creating a clear regulatory framework that people can refer to. In fact, Coinbase immediately filed a petition asking the SEC to develop a “workable regulatory framework for digital asset stocks.”

Why Mark Cuban thinks I’m a “Nona Mora”

Many industry players criticize the SEC for taking legal action without first establishing clear rules. But for Cubans, simply creating these rules could cause problems. In response to Senator Pat Toomey’s tweet on the subject, Cuban tweeted: Do you think that’s a bad thing? Wait and see what they offer for registration at Eton. This is the Ninth Blackberry, also known as the cryptocurrency industry.

Cuban has said in the past that it believes that regulation of the sector is necessary. However, there is a lot of debate on what this regulation should look like. For example, Cuban believes that cryptocurrency regulation should be based on existing fraud laws. He doesn’t want to create a cross-section of the bureaucracy that, he says, “would overwhelm thousands of lawyers.”

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On the other side of the debate, people like Treasury Secretary Janet Yellen “want to see the bigger picture so that there are no loopholes in the regulations.” Several agencies are responding to President Biden’s executive order that would create a framework for cryptocurrency laws. It is not yet known how burdensome this framework will be for existing projects and exchanges.

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More regulation is on the way and will have a major impact on the cryptocurrency industry. In the long run, this could inspire confidence and better position the entire market. However, cryptocurrency projects will almost certainly have to comply with multiple regulations, which can be costly and time-consuming. As a cryptocurrency investor, these discussions are worth following and even getting involved. The shape of any new cryptocurrency regulations could affect the long-term success of your investments.

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