A SEC Commissioner Challenges Enforcement Action Against LBRY
A commissioner from the U.S. Securities and Exchange Commission (SEC) has expressed disagreement with the agency’s enforcement action against LBRY, a blockchain-based file-sharing payment network. In a statement, SEC Commissioner Hester Peirce questioned the SEC’s decision, stating that there was insufficient evidence of fraud committed by LBRY. Peirce argued that LBRY had taken a more cautious approach compared to other projects and had a functioning blockchain at the time of token sales. She also criticized the SEC for targeting LBRY instead of pursuing projects engaged in obvious illegal activities.
Harsh Enforcement Actions and Disproportionate Remedies
Peirce further criticized the SEC for its harsh enforcement actions against LBRY. She highlighted that after winning on summary judgment, the SEC sought monetary remedies of $44 million and claimed that LBRY’s offer to burn all tokens was not enough assurance of future compliance. According to Peirce, these requested remedies were disproportionate to any harm caused by LBRY’s actions.
The Lawsuit and Reduced Fine
The SEC filed a lawsuit against LBRY in 2021, alleging that the company sold unregistered securities. In November 2022, a judge ruled in favor of the SEC. However, in May, the SEC reduced the fine imposed on LBRY from $22 million to $111,000.
Hot Take: Challenging the SEC’s Approach
SEC Commissioner Hester Peirce’s dissenting statement regarding the enforcement action against LBRY highlights her concerns about the agency’s decision-making process. She questions why LBRY was targeted when there were other projects engaging in fraudulent activities without attempting to comply with securities laws. Peirce also criticizes the harshness of the SEC’s enforcement actions and the disproportionate remedies sought. This dissenting opinion raises important questions about the SEC’s approach to regulating the crypto industry and the potential impact on legitimate projects.
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