Kevin O’Leary Anticipates ‘Oxygen Starvation’ for Binance Amid SEC Lawsuit

Sahana Kiran
Source – CNBC

The Securities and Exchange Commission [SEC] is ramping up its scrutiny of the cryptocurrency market, as evidenced by its recent lawsuits against prominent exchanges such as Binance and Coinbase. These legal actions have raised concerns about the survival of these exchanges as they navigate the allegations put forth by the regulatory body. Kevin O’Leary from Shark Tank emphasized the importance of these suits and their potential long-term impact on the industry.

Binance, the world’s largest crypto exchange, was hit with a total of 13 civil charges from the SEC. This included accusations of deception and violating securities laws. These legal challenges put the exchange in troubled waters. Despite Binance’s efforts to dispute these allegations, O’Leary is of the opinion that the SEC’s action will severely impact the firm’s capital and financial standing. He further added,

“The truth is, a regulated exchange is far less profitable than an unregulated, rogue one. [That is] until you get sued into the stone age by the SEC. And that’s where Binance finds itself today. Maybe you drift off into the shadows, and you only play in the rogue markets—but slowly but surely, you’ll be starved of oxygen. It’s not good, let’s look at it that way.”

What about Coinbase?

O’Leary believes that Coinbase’s decision to confront the SEC could deter institutional investors. He noted how Coinbase’s choice to engage in a legal battle with the SEC could be negative. This is mainly by institutional investors, potentially pushing them away from the firm. He said,

“​​The idea that you can beat the SEC—an institution with unlimited resources that has made a very focused charge—that’s not easy odds, and it’s not great for investors. You could understand how institutional investors are tired.”

Kevin O’Leary predicts SEC lawsuits as a catalyst for crypto market transformation

According to O’Leary, the recent suits by the SEC will be seen as a turning point in the industry. He believes that these legal actions will add to the change of the current notion of the crypto market. He thinks that it will turn from a “Wild West” environment to a more regulated and stable industry.

The Shark Tank star further said,

“I think as an industry, we’re going to leave the past behind, and we’re going to find a new future. There’s so much that this technology offers, and yet it remains mired in an unregulated, rogue-cowboy environment.”

Moreover, the outcome of these suits remains uncertain. However, during this period, both the crypto community and the market appear to be adapting to the scrutiny of this magnitude.