Commissioner Hester M. Peirce, affectionately nicknamed “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 on the alleged unregistered sale of LBRY tokens, has attracted a lot of attention due to the broader implications for the regulatory treatment of cryptocurrencies.
Peirce’s statement
Peirce expressed deep concern about the SEC’s approach in the LBRY case. In his statement he highlights the lack of clarity in the application of securities laws to cryptocurrency projects.
Noting that the Commission chose to target a company with a working blockchain and real-world applications, Peirce questions why the SEC went after LBRY instead of other projects she perceives as openly fraudulent.
The commissioner also criticizes the SEC’s initial request for a $44 million fine against LBRY, which was later reduced to $111,614.
Notably, the judge in the case also recognized the “measure of uncertainty” regarding the application of securities laws to the LBRY token offering.
Peirce regrets the result and suggests that such aggressive regulatory actions may discourage innovation and experimentation in the blockchain space.
Ripple’s main lawyer weighs in
Ripple General Counsel Stuart Alderoty took to X to express his gratitude to Commissioner Peirce and echo his concerns.
In its mailAlderoty emphasizes the unfairness of the SEC focusing on non-fraud cases that leave consumers waiting for action against genuine frauds.
It further suggests that perhaps it is time to break with traditional protocols and raise stronger objections. He hinted at the potential use of amicus curiae briefs, which are legal documents filed by non-parties who have a vested interest in the outcome of a case.
