The billionaire investor on Wednesday responded to Coinbase CEO Brian Armstrong’s allegations that the government regulator was threatening his company with a lawsuit over its new lending service.
“Brian, this is ‘Regulation via Litigation,'” tweeted Cuban. “They aren’t capable of working through this themselves and are afraid of making mistakes in doing so. They leave it to the lawyers. Just the people you don’t want impacting the new technologies.”
“You have to go on the offense,” continued the billionaire.
Brian, this is "Regulation via Litigation". They aren't capable of working through this themselves and are afraid of making mistakes in doing so. They they leave it to the lawyers. Just the people you don't want impacting the new technologies. You have to go on the offensive
— Mark Cuban (@mcuban) September 8, 2021
Armstrong on Tuesday accused the SEC of “really sketchy behavior,” saying the agency had classified its new lending service as a security without providing an explanation.
“They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why,” tweeted the Coinbase CEO.
Many centralized and decentralized cryptocurrency exchanges allow users to lend out digital assets like Bitcoin for recurring interest payments. But third party lending services this year have come under increasing scrutiny by regulators; five states, for instance, have accused the lending platform BlockFi of violating securities laws.
The SEC last week launched an investigation into the developers behind the decentralized exchange Uniswap.
Cuban is a vocal supporter of cryptocurrency, and Ethereum in-particular. Despite his hostility toward the SEC, he called for the agency to intervene in the space after a cryptocurrency project he invested in crashed to zero in June.