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If Gary Gensler had adopted the right regulatory approach, he could have saved FTX and Three Arrows Capital (3AC) from downfalls, said billionaire Mark Cuban during a recent episode of the All-In Podcast.
According to Cuban, the SEC Chairman favors enforcement actions over providing clear regulations, and he views this way of handling crypto regulations as an inefficient approach.
“The point there is [that] he has an approach that is regulation through litigation. He’s going to sue you first, ask questions later and hope that the result of that litigation becomes a rule that everybody else has to follow,” Cuban stated.
Cuban also pointed to his experience trying to register a token with the SEC but did not succeed due to the overly complicated registration process and lack of clarity.
He argued that instead of creating a burdensome registration process, Gensler should have implemented clear rules that encourage companies to operate responsibly. Pointing to Japan’s crypto lending regulations as an example, he suggested that had similar standards been in place in the US, the collapses of FTX and 3AC might have been avoided.
“If FTX wants to loan out all their Ethereum, you have to do what they did in Japan. You have to have 95% collateral and 95% of anything needs to be put in cold storage,” Cuban said.
“If he had followed the same rules for crypto that Japan did, FTX would still be in business…Bankman-Fried might still be in jail but FTX, 3AC, they’d still be in business,” he added.
The billionaire recently suggested that Kamala Harris might fire Gensler if she wins the White House. Gensler is also facing criticism following the SEC’s decision to appeal in the Ripple case.
Ripple CEO Brad Garlinghouse and Chief Legal Officer Stuart Alderoty called the SEC’s attempt a waste of taxpayer resources and vowed to fight back again in court.
Cuban backs John Deaton, criticizes Warren’s approach
Cuban publicly voiced his support for John Deaton, who is running for US Senate against Elizabeth Warren. The entrepreneur stressed that he is not a fan of Warren and her approach to crypto regulations.
“I’ve talked to her about crypto. I understand her position. Her basic position is [that] nation states use crypto to fund their operations,” Cuban said. “And she just wants to throw the baby out with the bath water, as opposed to using like I proposed, a blacklist from OFAC.”
Cuban stated that Deaton’s background, character, and pro-crypto stance made him a positive influence. He added that he was supporting Deaton even before he officially entered the race, providing him with feedback and advice.
“I think John Deaton will be better for the country, better for the citizens of Massachusetts than Elizabeth Warren would be,” Cuban stated.