(Yahoo!Finance) - If it were his choice, O’Leary Ventures Founder and Shark Tank investor Kevin O’Leary would fire Coinbase’s CEO amid the Security and Exchange Commission’s (SEC) crackdown on cryptocurrency.
O’Leary, also known as "Mr. Wonderful," criticized Coinbase (COIN) CEO Brian Armstrong for “butting heads” with the SEC — which on Tuesday sued the cryptocurrency platform for acting as an exchange, a broker, and a clearing agency without registering with the regulator. Coinbase also offered and sold securities without registering its offers and sales, the SEC alleged.
"He's a pioneer," O'Leary told Yahoo Finance Live about Armstrong (video above). "But if he worked for me, I'd fire him. I don't want to go to war with [SEC Chair Gary Gensler]."
Coinbase’s stock tumbled on Tuesday following the lawsuit. O’Leary said that if he were on the board or a shareholder of Coinbase, he would have withdrawn his money. He welcomed the crackdown and said he had no interest in putting money towards a service that was “at war” with the SEC.
“I'm actually happy this is happening,” O’Leary said. “Because of the potential of this asset class, it has been stymied. It's stuck in the mud, if you want to use those words.” O'Leary drew headlines last year after disclosing he received $15 million to be a spokesperson for failed crypto exchange FTX.
O’Leary blamed Armstrong for much of Coinbase's controversy with the SEC. After the lawsuit was filed on Tuesday, Armstrong alleged that the SEC changed its tone and responded with silence after questioning the company last year – an example of Armstrong spending too much time “butting heads,” O’Leary said.
Coinbase sued the SEC in April after warning that the regulator might be taking action against them, in a move to force the regulator to disclose whether it would change securities rules for digital assets like crypto or keep the same rule-making processes for other securities.
Firing the current Coinbase leader and replacing him with someone who does not want to be “Don Quixote” could make the company more valuable to invest in, O’Leary said. In addition, if the company enables short- and long-term capital gain, $1 trillion could enter the crypto market, he added.
Binance, the world’s largest crypto exchange, has also had a rough week with the SEC. On Monday, the regulator sued Binance for violating securities laws, mishandling customer funds, and misleading investors. Coinbase is also being sued by 10 states, which allege violations of state securities laws.
“I welcome” the litigation, O’Leary told Yahoo Finance Live.
The lawsuits are part of an ongoing legal battle that the SEC has waged this year. There’s also an industry-wide debate about whether certain digital currencies should be classified as commodities or securities, in which case they would be subject to oversight by the SEC and CFTC.
Beyond the litigation, O’Leary said he has significant issues with the crypto industry. It hasn’t gone anywhere for three years due to the absence of “institutional interest,” he explained. For example, bitcoin – a bellwether for the industry – has not moved in value, and it is hard to find crypto being used anywhere because of the lacking interest, he said.
Crypto is also worthless as an asset, he added, describing it as fun to cheer on but a “nothingburger” until the industry resolves its issues.
“While it's been great to be part of this wonderful nascent community, and cheering on this idea of a rogue nation of crypto trading, it's worthless” right now, O’Leary said.
By Jared Mitovich · Writer
