SEC Commissioner SPEAKS OUT Against LBRY Decision• October 28, 2023 12:58 pm • Comments
The SEC case against LBRY was nothing short of criminal, according to investors, legal scholars, attorneys, and even an SEC Commissioner.
Hester Pierce is one of the few at the SEC who has not been openly hostile toward the nascent blockchain industry and the digital asset markets.
She has spoken out against the Securities and Exchange Commission’s targeting of blockchain and crypto several times.
Now, she is back with a dissenting opinion on the way the SEC unfairly attacked LBRY.
Recall that nothing in the LBRY case suggested fraud or otherwise—no one alleged that the firm was conducting fraud. LBRY was an innovative use of blockchain technology that the government did not like.
Commissioner Pierce issued this lengthy statement dissenting from the Securities and Exchange Commission’s handling of the LBRY case:
Ripple’s CLO Stuart Alderoty had this to say: “Thank you, Commissioner. When you see injustices like this continue in non-fraud cases (while consumers wait for recourse from actual frauds) perhaps it’s time to let ordinary rules of protocol go by the wayside and speak out louder and sooner? Perhaps even with an amicus brief?”
Thank you Commissioner. When you see injustices like this continue in non-fraud cases (while consumers wait for recourse from actual frauds) perhaps it’s time to let ordinary rules of protocol go by the wayside and speak out louder and sooner? Perhaps even with an amicus brief?
— Stuart Alderoty (@s_alderoty) October 27, 2023
Coin Telegraph provided some background information on the LBRY case:
In July, blockchain-based file-sharing and payment network LBRY was determined to have violated Section 5 of the Securities Act 1933.
Consequently, LBRY was permanently barred from engaging directly or indirectly in unregistered cryptocurrency securities offerings involving its native token.
Consultant and university lecturer Austin Campbell provided his analysis of the situation:
“What this means is that the SEC was primarily angry that LRBY did not register as a security and dared to use a blockchain and distribute tokens.
In short, the sin here was not following some paperwork rules that don’t work for blockchains because the SEC refuses to make rules for blockchains and instead oppose the technology, any innovation away from SEC-centralized control of securities markets, an especially oppose those who dare to not pay the gangsters at the SEC their protection money.
Why do I say that last line? Let’s look at how the SEC protected investors in this case. They:
1 – Destroyed a functioning business, which is now bankrupt and shutting down.
2 – Grievously damaged the investors, who will not recover their funds in bankruptcy thanks to the fatal actions not of the market, not of the company, and not of the customers, but rather only the SEC.
3 – Wiped out the LBRY token holders, as now those tokens have no value.
4 – Will attempt to collect on a settlement that will expropriate all of those people while being used to pay the salaries of the very SEC bureaucrats that destroyed the whole thing.
This is the equivalent of a SWAT team showing up at the house of an innocent person, throwing out all the occupants, burning the house down, and then auctioning off the remains at a huge discount and keeping the proceeds because of the cost of the “fire response” from the fire they themselves started.
Do you know who actually behaves this way? Organized criminal gangs.
This is a protection racket, and the mafia is probably silently applauding the audacity of the SEC here to destroy a project and then make the project pay them for being destroyed to set an example for others about the folly of standing up to petty bureaucrats.
I am, in general, in favor of positive regulations, but this is completely insane and an affront to the dignity of Americans and all investors.
We should not tolerate this, and the only just response to this conduct should be to terminate every single person involved at the SEC and the leadership who greenlit this, or failing that, zero the entire budget for the SEC and start over if this is their idea of capital formation and investor protection.”
The LBRY settlement is a picture-perfect example of how not to regulate, and should be considered a national scandal.
With @HesterPeirce's statement today, I feel that I should finally weigh in on this one, to make clear just how wildly egregious the conduct of the SEC was in…
— Austin Campbell (@CampbellJAustin) October 27, 2023
Attorney Bill Morgan likewise exclaimed: “The LBRY decision is the most unjust non-criminal decision I can recall in my legal career. The conduct of the SEC and the decision of the court were a disgrace.”
The LBRY decision is the most unjust non-criminal decision I can recall in my legal career. The conduct of the SEC and the decision of the court were a disgrace. You ask this question 👇/1 https://t.co/Wqu4DyuFXD pic.twitter.com/WTrogYCygF
— bill morgan (@Belisarius2020) October 27, 2023
Forkast recently reported:
Blockchain publishing platform LBRY Inc. announced that it is shutting down operations as it is unable to pay its debt to the U.S. Securities and Exchange Commission (SEC), its legal team and private debtors.
Join the conversation!
We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.