Hester Peirce, a commissioner at the US Securities and Exchange Commission (SEC), expressed her dissatisfaction with the agency's handling of accusations against cryptocurrency startup LBRY.
Despite the SEC's claims that the application of securities laws to cryptocurrency projects is clear, Peirce argues otherwise.
“There is no way for a company like LBRY to come in and register a functional token offering,” Peirce said. Peirce also added that even if a company manages to register its token offering, it would not be a very useful step.
Peirce's comments come after LBRY Inc announced on October 19 that it would close, years after the SEC first accused the company of selling unregistered securities. The firm allegedly received more than $11 million in US dollars, Bitcoin and services during the token offering.
Debt-burdened LBRY had decided not to continue its fight against the SEC in the First Circuit, where it had filed to vacate a lower court's decision that ruled its token was a security.
“I did not support filing the lawsuit, but I was unable to speak publicly about my concerns while the lawsuit was pending,” Peirce said.
The company said the following in its statement last week:
“BRY Inc. His company owes money to the SEC, his legal team, and a private debtor that he can't pay. Its assets, including Odysee, are being transferred to trustee. As of this writing, all LBRY executives, employees and board members have resigned.”
In the decision dated July 2022, the judge refused to comment on whether LBRY's token, LBC, was a security. Peirce noted that this means the LBRY blockchain can survive, albeit on a more difficult path:
“The Commission's action forced a group of entrepreneurs to abandon what they had developed. “Our disproportionate response in this case will deter people from trying blockchain technology.”
*This is not investment advice.