Hester Peirce of the United States Securities and Exchange Commission (SEC) issued a dissenting opinion on the regulator's lawsuit against blockchain company LBRY.
In a statement on October 27, Peirce described feel โuneasyโ following the SEC's enforcement action against LBRY in March 2021. In November 2022, a judge ruled in favor of the SEC, stating that the company's LBC token was a security. Although LBRY appealed the decision, the company announced in October that planned to relaxciting millions of dollars in debt due to legal costs.
"This case illustrates the arbitrariness and real-life consequences of the Commission's misguided approach to cryptocurrencies," Peirce said.
Some overdue thoughts 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 "baffling" given that there was no evidence of fraud and the company took a conservative approach to digital assets compared to other crypto projects. The SEC commissioner suggested that there was no clear path for a project like LBRY to arrive and register with the regulator, and that โit would not be a particularly useful effortโ if it had managed to do so.
โ[T]โThe Commission took an extremely tough approach in this case,โ Peirce said. โFor example, after winning at 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. โThe reparations requested by the Commission were completely disproportionate to any damage.โ
She added:
โThe time and resources we devoted to this case could have been spent building a viable regulatory framework that companies like LBRY could have followed. โThen the market could have decided the fate of LBRY.โ
"The Commission's action forced a group of businessmen to abandon what they built," Peirce said. "Our disproportionate reaction in this case will discourage people from experimenting with blockchain technology."
Related: SEC reviews $22 million fine against LBRY and seeks $111,000 instead
Peirce has often been a dissenting voice at the SEC in cryptocurrency-related law enforcement cases. In September, she told Cointelegraph that crypto companies He shouldn't give up on trying to launch it in the United States, but added that he believed the commission was "long behind schedule" in finding a solution for a regulatory framework.
Gary Gensler, who chairs the SEC, has often called out crypto companies โcome in and talkโ to the regulator to avoid potential enforcement actions. To date, the regulator has filed lawsuits against crypto exchanges Binance and Coinbase, and many other companies in the space.
Magazine: Crypto Regulation: Does SEC Chairman Gary Gensler Have the Last Word?
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