Hester Peirce, SEC commissioner and agency leader, has once again dissented from an important crypto-related policy decision.
Peirce who had previously expressed her support for a Bitcoin ETF and many other aspects of crypto, said she did not approve the Securities and Exchange Commission decision to prosecute LBRY.
The SEC filed a lawsuit against the blockchain-based file-sharing network in March 2021 — accusing it of offering LBRY Credit tokens (LBC) without registering them as securities.
LBRY CEO Jeremy Kauffman has previously expressed concerns that the decision could endanger US Crypto industry as a whole, because it could establish a precedence which could categorize crypto assets. “almost every cryptocurrency” As security.
“The commission has brought many troubling crypto enforcement actions, but the LBRY…case has especially unsettled me,” He noted.
LBRY was adamant about its approach. “more conservative” Pierce stated that the SEC action against the firm was more severe than the other projects, he said. “especially puzzling.” Monetary remedies sought by the SEC — originally amounting to $44 million — were “entirely out of proportion to any harm,” She added.
LBRY announced last week that it will cease its operations. It cited a legal loss to the SEC.
“Are investors and the market really better off now after the Commission’s litigation contributed to the demise of a company that had built a functioning blockchain with a real-world application running on top of it?” Peirce has added to the statement. “This case illustrates the arbitrariness and real-life consequences of the Commission’s misguided enforcement-driven approach to crypto.”
SEC spokesperson did not respond to a comment request immediately.
Peirce’s comments are not her first against SEC resistance to crypto. In March, she told Florida International University’s law students that regulations should be in place before enforcement.
These comments were made before the SEC filed suit against Coinbase and Binance the same week, in June. These cases, both of which involve allegations of securities violations, continue to be heard. Crypto exchanges deny any wrongdoing.
Peirce, in an interview with CNBC Monday, said she has believed for five years that the regulator should approve a spot bitcoin ETF — noting “the logic for why we haven’t [approved one] has always mystified me.”
In April 2021, the SEC Commissioner proposed a “safe harbor” proposal that would allow developers to test decentralized networks during a grace period while still being exempted by certain federal securities laws.
“Our disproportionate reaction in this case will dissuade people from experimenting with blockchain technology, which LBRY aptly describes as ‘technology that enables dissent,'” Peirce told Friday. “A government of a free people should welcome dissent and the technologies that enable it.”
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