A 2024 soundbite — that the SEC chair could 'cost Biden the election' over crypto — hid a genuinely important, non-partisan question: rules vs regulation-by-lawsuit. The substance behind the drama, and how it actually resolved.
In 2024, entrepreneur Mark Cuban made a striking claim: that the head of the US securities regulator could 'literally cost Joe Biden the election' over how crypto was being policed. Strip away the election-year drama and it's a useful window into a genuinely important, non-partisan question — how should a government regulate crypto, and what happens when it does so mainly through lawsuits instead of clear rules? That fight didn't end with an election; it shaped the actual laws the US has been writing since. Here's the substance behind the soundbite, kept clear of the politics.
Behind the election soundbite: a real question about whether crypto is policed by clear rules or by lawsuits. Illustration by Aliteq. · Illustration by Aliteq / generated with Higgsfield
'Regulation by enforcement' — the actual complaint
The heart of Cuban's argument wasn't really about any candidate; it was a widely-shared industry frustration. The claim: rather than publishing clear rules for how a crypto company can legally register and operate, the SEC largely acted by suing companies after the fact, effectively defining the rules through litigation. Critics said this 'regulation by enforcement' made it nearly impossible for legitimate businesses to know how to comply — while, they argued, doing little to stop the outright frauds that actually hurt ordinary people. Supporters of the SEC's approach countered that many tokens genuinely were unregistered securities and that aggressive enforcement was protecting investors from a market full of scams. Both things can be partly true, which is what made it a real debate rather than a slogan.
The question underneath: who regulates crypto?
The unglamorous core is a jurisdiction problem. US securities law (enforced by the SEC) is strict and disclosure-heavy; commodities law (the CFTC) is lighter. Whether a given crypto token is a 'security' or a 'commodity' therefore decides which rulebook — and how heavy a burden — applies, and the law was written long before crypto existed. Cuban's proposed fix was the same one much of the industry wanted: have Congress pass crypto-specific rules, or assign more of crypto to the CFTC, so companies have a clear path to compliance instead of guessing. That's a policy design question, not a partisan one.
Quick answers
What did Mark Cuban actually say?
In mid-2024 he argued that the SEC's crypto approach under Gary Gensler was alienating crypto-owning voters and could hurt the incumbent's re-election, even saying Gensler could 'literally cost Joe Biden the election.' We report it as a claim about a regulatory debate, not as a political position of our own.
What is 'regulation by enforcement'?
The criticism that a regulator sets the rules for an industry mainly by suing companies after the fact, rather than by publishing clear guidance up front. Critics said the SEC did this with crypto, leaving legitimate firms unsure how to comply; defenders said enforcement was protecting investors from genuine fraud.
Is crypto a security or a commodity?
It depends on the token and is legally contested. The SEC has treated many tokens as securities (strict rules); critics wanted clearer standards or more oversight by the CFTC (commodities, lighter rules). Resolving this jurisdiction question is exactly what recent US legislation has tried to do.
Why does a 2024 political spat still matter?
Because the underlying demand — clear rules instead of enforcement-by-lawsuit — largely shaped what followed: US stablecoin legislation and a framework dividing crypto oversight. The soundbite was dated; the regulatory shift it reflected is very much current.
