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After the SEC won its case against LBRY, SEC Commissioner Hester Peirce published her statement of dissent against her own agency’s actions on its public website.
Are investors better off now?
Only after all the litigation had taken place and the LBRY crypto company was found guilty of issuing unregistered securities was Commissioner Peirce free to publish her thoughts on this case.
She began by saying that she did not support her agency’s bringing of the case against LBRY, and asked the question as to whether the public was really better off, now that a “functioning blockchain with a real-world application running on top of it” had been taken down via the SEC’s enforcement action?
The SEC’s hardline approach
She made the case that the SEC wouldn’t have had to look far in order to find plenty of fraudulent crypto projects that they could have instead spent their time and public money on. The SEC found no evidence of fraud in the LBRY case and was accused by Commissioner Peirce of “taking an extremely hardline approach” against the company when it sought $44 million in “monetary remedies” and would not even allow the offer from LBRY to burn all its tokens as an assurance that it would not violate the registration process again.
Securities laws not clear
On securities laws as they pertain to crypto, Peirce was adamant that they were not “clear”. She stated:
“The application of the securities laws to token projects is not clear, despite the Commission’s continuous protestations to the contrary. There is no path for a company like LBRY to come in and register its functional token offering.”
She then 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.
A scorched earth approach
Commissioner Peirce went on to say that the “scorched earth” approach that the SEC took against LBRY was “completely out of proportion” to any harm that might have occurred to investors in the token. She mused that those who did invest might likely have “preferred that the company continue to exist to support the blockchain”.
The Commissioner added fuel to her statement with the following denouncement of the SEC’s actions in this case:
“The Commission’s action forced a group of entrepreneurs to abandon what they built. Our disproportionate reaction in this case will dissuade people from experimenting with blockchain technology, which LBRY aptly describes as “technology that enables dissent.”A government of a free people should welcome dissent and the technologies that enable it.”
Jailed for using crypto instead of CBDCs
Commissioner Peirce ended by quoting a tweet from the LBRY team earlier this year:
“It’s the year 2028, hundreds of thousands of Americans have been jailed for using illegally cryptocurrency instead of CBDCs, and Hester Pierce [sic] is still just writing dissenting memos.”
The commissioner quipped that she would probably be “tending bees” rather than “writing dissents” in 2028, and admitted that she did not have answers that would prevent other projects like LBRY from going through the same process in the future, and remarked that she would therefore welcome any suggestions from the public.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.