Commissioner Hester M. Peirce, affectionately dubbed "Crypto Mom" in the digital currency community, has issued a strong dissent against a recent enforcement action by the Securities and Exchange Commission (SEC) that resulted in the shutdown of LBRY, a blockchain company.
The case, which centered around the alleged unregistered sale of LBRY tokens, has drawn significant attention due to the broader implications for the regulatory treatment of cryptocurrencies.
Peirce's statement
Peirce expressed her deep concern about the SEC's approach in the LBRY case. In her statement, she highlights the lack of clarity in the application of securities laws to cryptocurrency projects.
Pointing out that the Commission chose to target a company with a functioning blockchain and real-world applications, Peirce questions why the SEC went after LBRY instead of other projects that she perceives as outright fraudulent.
The commissioner also criticizes the SEC's initial request for a $44 million penalty against LBRY, which was later reduced to $111,614.
Notably, the judge in the case also acknowledged the "measure of uncertainty" regarding the application of securities laws to LBRY's token offering.
Peirce laments the outcome, suggesting that such aggressive regulatory actions may discourage innovation and experimentation in the blockchain space.
Ripple's top lawyer weighs in
Stuart Alderoty, Ripple's general counsel, took to X to express gratitude to Commissioner Peirce and echo her concerns.
In his post, Alderoty emphasizes the injustice of the SEC targeting non-fraudulent cases that leave consumers waiting for action against genuine frauds.
He further suggests that perhaps it's time to break from traditional protocols and raise more vigorous objections. He hinted at the potential use of amicus briefs, which are legal documents submitted by non-parties who have a strong interest in a case's outcome.
Godfrey Benjamin
Arman Shirinyan
