Hester Peirce has expressed concern over the SEC’s method in direction of crypto enforcement, explicitly referencing the latest LBRY case.
Commissioner Hester Peirce of the Securities and Alternate Fee (SEC) on Oct. 27 shared her ideas in regards to the company’s therapy of blockchain-based file sharing and cost community LBRY.
In her statement, Peirce highlighted that LBRY had been singled out by the SEC regardless of it having a functioning blockchain with a real-world utility. She decried the Fee’s function within the demise of LBRY following the corporate’s shutdown after failing to appeal the court docket resolution that went in opposition to it.
“Are buyers and the market actually higher off now after the Fee’s litigation contributed to the demise of an organization that had constructed a functioning blockchain with a real-world utility operating on high of it?”
Hester Peirce, SEC Commissioner
The commissioner mentioned the SEC was misaligned with its “misguided enforcement-driven method to crypto.” She additionally condemned the regulator for not having a transparent path mapped out for firms like LBRY to have the ability to register purposeful token choices.
She argued that the SEC might have used the time and assets spent on the LBRY case to create clear rules that will profit the crypto sector as a substitute of this blind blame sport.
Columbia Enterprise Faculty professor Austin Campell echoed Commissioner Pearce’s sentiments and described the SEC’s conduct within the LBRY case as “wildly egregious” and a “nationwide scandal.”
Based on him, the SEC had an issue with how LBRY rolled out its native token. The corporate didn’t register it as a safety. The Fee took punitive measures and demanded $44 million in fines, which Campbell felt was odd as a result of there have been no allegations or proof of fraud.
Ultimately, the court docket permitted the high quality however reduced it to $111,614. By then, it was too late. The injury was already accomplished, and LBRY went bankrupt quickly after.
Campbell went on to strongly advocate for an entire overhaul of the SEC’s management to permit guidelines extra accommodating to improvements like blockchains slightly than hindering them with what he considers outdated rules.
