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- Coinbase should be "aggressive" in engaging with the SEC over its threat to sue the crypto exchange, Mark Cuban said Thursday.
- That would be better than the regulator taking on a small entity and getting a quick court judgement that applied to all of decentralized finance, he said.
- The "Shark Tank' investor said crypto needs "exemptions like the internet got in the '90s."
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Mark Cuban has urged Coinbase to be aggressive in engaging with the Securities and Exchange Commission over its plan to sue the crypto exchange, as it's better placed than a smaller company to go up against the regulator in a battle over rules.
The billionaire and "Shark Tank" investor also called for regulatory exemptions in a series of tweets late Wednesday.
The SEC has threatened to take legal action against Coinbase if it launches Lend, a product that will offer users 4% interest on their holdings of USD coin. Cuban, who believes the SEC is engaging in "regulation via litigation," said the case could shape decentralized finance, or DeFi.
"By suing, @sec_news gets to play on their home court to regulate it. It could change how DeFi works, but also grow it," the billionaire investor tweeted.
Given that, the crypto industry would benefit if Coinbase, the largest crypto exchange in the US, went up strongly against the regulator, his comments suggested.
"Which is why it's important for Coinbase to be aggressive in their engagement with the SEC. It's better for the industry that they take on the SEC rather than the SEC go after a small decentralized entity and get a quick judgement that becomes the law of the land for DeFi," he said.
The SEC has said Coinbase's Lend program turns USDC holdings into securities bearing interest, like government bonds. But it hasn't explained how it reached that conclusion, according to a blog post by the crypto exchange's legal officer.
Cuban suggested it's better for Coinbase to go after the SEC to fend off a court judgement that harms the crypto industry. He used a "savecryptofromtheSEC" hashtag, which quickly gained traction on Twitter.
"The worst case is that the SEC gets a judgment that cripples Crypto/DeFi and moves it even further offshore, killing possibly trillions of $$$ in economic benefit for the USA. We need exemptions like the internet got in the 90s. Call your congressperson," he said.
The SEC and Coinbase didn't immediately respond to Insider's request for comment.