Hester Peirce, commissioner of the U.S. Securities and Exchange Commission (SEC), issued a statement of dissent that referred to how the commission dealt with the LBRY case. Peirce criticized the approach that the SEC took when, according to her, the company had made significant disclosures about its token offering, having “no path” to register its token offering.
Commissioner Hester Peirce Raises Her Voice on SEC v. LBRY
Hester Peirce, a commissioner of the U.S. Securities and Exchange Commission (SEC) known as “Crypto Mom,” has recently issued a statement of dissent regarding how the commission managed the case against LBRY, which created a blockchain decentralized publishing platform with its token, now that litigation in this case is over.
In an industry of frauds and scams, Peirce criticized the SEC’s determination to go after LBRY when the company had already created a working product and took a more “conservative approach” than other projects.
Given that LBRY did make a series of disclosures to customers that the SEC didn’t qualify as “fraudulent or misleading,” Peirce criticized the “scorched earth” approach the commission took in this particular case.
Peirce stated:
Why go after a company that sold a token for a functioning blockchain with an established use when we could have pursued plenty of other projects that were outright frauds and did not attempt to comply with the securities laws?
‘There Is No Path for a Company Like LBRY to Come in and Register’
Peirce continued to blast the commission for this enforcement action, arguing that there is no clear path for crypto projects to register their operations with the commission.
Peirce explained:
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.
Peirce’s statements resonate with ideas expressed by executives of companies battling SEC’s enforcement actions, like Coinbase CEO Brian Armstrong and Ripple’s CEO Brad Garlinghouse, who have criticized the lack of clarity in the space.
Nonetheless, SEC President Gary Gensler has stressed several times that there is indeed a clear path for crypto companies to register with the commission, with a firm called Prometheum being the only receiver of a special purpose broker-dealer for digital assets.
Prometheum is currently being probed by several lawmakers, who have qualified its license approval as “shady.”
What do you think about SEC Commissioner Hester Peirce’s thoughts on the legal actions against LBRY? Tell us in the comments section below.