Hester Peirce of the United States Securities and Exchange Commission (SEC) has issued a dissenting opinion on the regulator’s lawsuit against blockchain agency LBRY.
In an Oct. 27 assertion, Peirce described feeling “unsettled” following the SEC’s enforcement motion against LBRY in March 2021. In November 2022, a decide dominated in favor of the SEC, stating that the agency’s LBC token was a safety. Though LBRY appealed the choice, the corporate introduced in October that it planned to wind down, citing thousands and thousands of {dollars} in debt as a result of authorized prices.
“This case illustrates the arbitrariness and real-life consequences of the Commission’s misguided enforcement-driven approach to crypto,” mentioned Peirce.
Some overdue ideas on our case against LBRY: https://t.co/wLsG4Xr7wz
— Hester Peirce (@HesterPeirce) October 27, 2023
According to Peirce, the SEC’s case against LBRY was “puzzling” given there was no proof of fraud and the agency took a conservative strategy to digital property in comparison with different crypto tasks. The SEC commissioner advised that there had been no clear path for a undertaking like LBRY to come back in and register with the regulator, and “it would not be a particularly useful effort” if it had managed to take action.
“[T]he Commission took an extremely hardline approach in this case,” mentioned Peirce. “For example, after winning on summary judgment, the Commission sought monetary remedies of $44 million and asserted that LBRY’s offer to burn all tokens in its possession was not sufficient assurance that LBRY would not violate the registration provisions in the future. The Commission’s requested remedies were entirely out of proportion to any harm.”
She added:
“The time and resources we expended on this case could have been devoted to building a workable regulatory framework that companies like LBRY could have followed. Then the market could have decided LBRY’s fate.”
“The Commission’s action forced a group of entrepreneurs to abandon what they built,” mentioned Peirce. “Our disproportionate reaction in this case will dissuade people from experimenting with blockchain technology.”
Related: SEC revises $22M penalty against LBRY, seeks $111K instead
Peirce has typically been a dissenting voice on the SEC in crypto-related enforcement instances. In September, she told Cointelegraph that crypto firms shouldn’t surrender on attempting to launch within the United States, however added she believed the fee was “far behind” find an answer for a regulatory framework.
Gary Gensler, who chairs the SEC, has typically called on crypto firms to “come in and talk” to the regulator to keep away from potential enforcement actions. To date, the regulator has filed lawsuits against crypto exchanges Binance and Coinbase and lots of different companies within the area.
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?
