A recent letter from the U.S. Securities and Exchange Commission (SEC) to leading investment management firm Grayscale has sparked a reaction among the crypto and Filecoin community. The SEC labeled Filecoin a financial security while responding to Grayscale’s Filcoin Trust registration statement.
Billionaire investor Mark Cuban commented on a recent tweet about the SEC’s claims. While articulating his response, Cuban suggested ways crypto firms can avoid future SEC lawsuits on potential securities law violations.
Mark Cuban’s Lawsuit-Evading Idea
Mark Cuban narrated a scenario where cryptocurrency issuing firms could evade an SEC lawsuit by releasing their entire token supply without leaving treasury reserves. Cuban suggested that the companies use their tokens for liquidity on decentralized finance (DeFi) applications.
Then, dissolve the original entity that released the tokens, circling in the secondary market without direct ties to the underlying blockchain.
The billionaire tagged his idea “true decentralization.” That will prevent regulators like the SEC from closing down the token like it’s trying to do with Filecoin and others.
Cuban’s suggestion stirred reactions from the crypto community members. Someone said the US securities laws are “black holes that suck in everything…
