Billionaire Mark Cuban Warns of Next Crypto Implosion Coming From Wash Trades
Mark Cuban, a Shark Tank star and the owner of the NBA team Dallas Mavericks, has warned that the next crypto implosion could come from “the discovery and removal of wash trades” on centralized exchanges. The billionaire’s comments followed the collapse of crypto exchange FTX which wiped out billions of dollars of customer funds.
Mark Cuban on the Next Crypto Implosion
Shark Tank star and the owner of the NBA team Dallas Mavericks, Mark Cuban, shared his thoughts on the next crypto implosion with The Street, published Friday. The billionaire said:
I think the next possible implosion is the discovery and removal of wash trades on central exchanges.
“There are supposedly tens of millions of dollars in trades and liquidity for tokens that have very little utilization,” Cuban emphasized. “I don’t see how they can be that liquid.”
However, the Shark Tank star admitted: “I don’t have any specifics to offer to support my guess.”
Wash trading has long been a concern with cryptocurrency exchanges attempting to inflate their trading volumes. Wash trades are among the manipulative practices prohibited by the Securities and Exchange Commission (SEC), and regulators worldwide are increasingly cracking down on wash trading involving cryptocurrencies.
Kim Grauer, director of research at blockchain analytics firm Chainalysis, said in September last year that wash trading in the crypto space is currently “a legal gray area that we’re all trying to figure out how this should be regulated and what’s illegal.”
The crypto industry is also suffering from the aftermath of the collapse of crypto exchange FTX, which filed for bankruptcy in November. Former FTX CEO Sam Bankman-Fried (SBF) has been charged with multiple counts of fraud. However, he has pleaded not guilty to those charges.
Cuban said in November that if he were Bankman-Fried, he would “be afraid of going to jail for a long time.” He stressed: “It sure sounds bad.” The billionaire owner of the Dallas Mavericks previously explained that recent blowups in the crypto space, including the FTX implosion, were “banking blowups,” rather than “crypto blowups.”
The Shark Tank star believes that bitcoin is a good investment; he called gold investors “dumb.” He also revealed that he invests in crypto because he expects smart contracts to “have a significant impact in creating valuable applications.”
Do you believe Mark Cuban is right about the next crypto implosion coming from wash trades on centralized exchanges? Let us know in the comments section below.