Mark Cuban, the billionaire shark tank investor and the owner of the NBA team Dallas Mavericks, has said that the discovery and removal of wash trades on centralised exchanges could cause the next crypto implosion in the industry. His comments surfaced in the media in the wake of the FTX crypto exchange meltdown, which resulted in a huge loss of billions of dollars of customer funds towards the end of last year. According to a report by Bitcoin.com, Cuban said, “I think the next possible implosion is the discovery and removal of wash trades on central exchanges.”
He further added that there are supposedly tens of millions of dollars in trades and liquidity for tokens that have very little utilisation. Cuban wondered and said, “I don’t see how they can be that liquid.” However, he agrees that he does not have any particular information to support his predictions and warnings.
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Wash trading has been a cause of concern for crypto exchanges, as it falls under the category of manipulative practices. The Securities and Exchange Commission (SEC) has also prohibited these activities. Multiple other regulators across the world have been imposing restrictions on wash trading of cryptocurrencies.
According to the report, Kim Grauer, director of research at blockchain analytics agency Chainalysis, said that wash trading in the crypto industry at present is “a legal grey area that we’re all trying to figure out how this should be regulated and what’s illegal.”
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Cuban’s warnings have come amid the ongoing hearings about the FTX crypto exchange failure, in which former CEO Sam Bankman-Fried is facing multiple charges of fraud and conspiracies. Currently, he is out on bail after agreeing to be put under house arrest. Earlier, Bankman-Fried said that he thought he did not have any criminal liability.
In November 2022, Cuban commented that he would “be afraid of going to jail for a long time” if he were in Bankman-Fried’s place. He also stated that the FTX collapse was so bad.
Describing the recent implosions in the crypto industry, he said they were all “banking blowups” and not “crypto blowups.”
Mark Cuban has been in the news for some time, as he said that Bitcoin is a better investment than gold. He even termed gold investors “dumb.”
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