The SEC’s Handling of LBRY Charges Criticized by Commissioner
Hester Peirce, a commissioner at the Securities and Exchange Commission (SEC), expressed her dissatisfaction with the agency’s approach to charges against crypto startup LBRY. Despite the SEC’s claim that the application of securities laws to token projects is clear, Peirce argued that this is not the case. She stated that there is no viable path for a company like LBRY to register its functional token offering, and even if it did, it would be an ineffective effort.
Peirce emphasized the importance of compliance for investors. Her comments come after LBRY Inc., which was charged by the SEC with selling unregistered securities, announced its closure. The startup received over $11 million in US dollars, Bitcoin, and services during its token offering.
Appeal Abandoned by LBRY
Last month, LBRY appealed the judge’s decision that subjected its token to regulatory oversight and required the company to pay over $111,614. However, LBRY later decided not to proceed with its appeal due to debts owed to the SEC, legal team, and a private debtor. As a result, all LBRY executives, employees, and board members have resigned.
Although the judge did not comment on whether LBRY’s token was a security in a July 2022 ruling, Peirce believes that this outcome will make it more challenging for the LBRY blockchain to continue operating.
Hot Take: The Impact of SEC Action on Blockchain Innovation
The actions taken by the SEC in this case have forced entrepreneurs to abandon their work and will discourage experimentation with blockchain technology. According to Peirce, this technology enables dissent and should not be stifled by disproportionate regulatory measures.
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