Billionaire and crypto investor Mark Cuban urged Coinbase Global Inc (NASDAQ:COIN).'s chief executive Brian Armstrong to “go on the offensive” after the crypto exchange was threatened with a lawsuit by the US Securities and Exchange Commission.
Coinbase announced on Wednesday it had been warned it could face legal action if it goes ahead with the launch of its Lend product, which allows eligible customers to earn interest on select assets on Coinbase.
The SEC considers Lend to involve a security, hence its concerns. Coinbase disputes this.
READ: US SEC threatens to sue Coinbase over crypto lending product
Coinbase said it had been proactively engaging with the SEC on Lend, but the agency refused to share the reason for its ruling on the product.
In a Twitter thread, Brian Armstrong accused the SEC of “sketchy behaviour”.
In response, Cuban tweeted to Armstrong: “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 leave it to the lawyers. Just the people you don't want impacting the new technologies. You have to go on the offensive."
Cuban has a history with the SEC, according to the Decrypt website. In 2013, he won an insider trading case brought against him by the agency. Cuban refused to settle, instead opting to go to trial and spending US$12 million before being exonerated by a jury.