{"id":6436,"date":"2023-10-28T16:47:37","date_gmt":"2023-10-28T16:47:37","guid":{"rendered":"https:\/\/infundpros.com\/markets\/crypto\/sec-commissioner-hester-peirce-challenges-secs-actions-in-lbry-case\/"},"modified":"2023-10-28T16:47:37","modified_gmt":"2023-10-28T16:47:37","slug":"sec-commissioner-hester-peirce-challenges-secs-actions-in-lbry-case","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=6436","title":{"rendered":"SEC Commissioner Hester Peirce Challenges SEC&#8217;s Actions in LBRY Case"},"content":{"rendered":"<div>\n<figure id=\"attachment_122240\" aria-describedby=\"caption-attachment-122240\" style=\"width: 900px\" class=\"wp-caption aligncenter\"><noscript><\/noscript><figcaption id=\"caption-attachment-122240\" class=\"wp-caption-text\">Source: iStock\/Pgiam<\/figcaption><\/figure>\n<p><strong>Hester Peirce<\/strong>, a commissioner at the <strong>Securities and Exchange Commission (SEC)<\/strong>, has expressed her strong disapproval of the agency\u2019s handling of charges against cryptocurrency startup LBRY.<\/p>\n<p>In a <span data-preserver-spaces=\"true\">statement released on Friday<\/span>, Peirce, known for her favorable stance towards the crypto industry, argued that the SEC\u2019s claims of clear application of securities laws to token projects are unfounded.<\/p>\n<p>Contrary to the agency\u2019s assertions, Peirce claimed that there is currently no viable avenue for companies like LBRY to register their functional token offerings with the SEC.<\/p>\n<p>Moreover, she emphasized that even if registration were possible, it would be an exercise of little practical value.<\/p>\n<p>\u201cEven if a company did manage to register its token offering, it would not be a particularly useful effort.\u201d<\/p>\n<p>Peirce underlined the importance of compliance for investor protection but highlighted the lack of feasible options available to token projects seeking regulatory approval.\n<\/p>\n<h2>LBRY Announces Plans to Shut Down Operations<\/h2>\n<p>\nPeirce\u2019s comments come in the wake of recent announcement from LBRY, which revealed that the <span data-preserver-spaces=\"true\">company would be shutting down<\/span>.<\/p>\n<p>The decision follows years of legal conflict with the SEC, which initially charged LBRY with selling unregistered securities and alleged that the firm had raised over $11 million in U.S. dollars, Bitcoin, and services during its token offering.<\/p>\n<p>Expressing her frustration, Peirce revealed that she did not support the SEC\u2019s decision to pursue the case against LBRY but had been unable to publicly voice her concerns while the litigation was ongoing.<\/p>\n<p>LBRY had previously appealed the judge\u2019s ruling that deemed its token subject to regulatory oversight and ordered the company to pay over $111,614. However, the company later abandoned its appeal.<\/p>\n<p>In light of the situation, LBRY said that it is burdened with debts to the SEC, its legal team, and a private debtor that cannot be repaid.<\/p>\n<p>Consequently, the company\u2019s assets, including Odysee, are being placed into receivership.<\/p>\n<p>\u201cAs of this post, all LBRY executives, employees, and board members have resigned. All will be doing what is required to satisfy any outstanding legal requirements, but no more,\u201d the startup said last week.<\/p>\n<p>The judge\u2019s ruling in July 2022 did not explicitly address whether LBRY\u2019s token, LBC, should be classified as a security.<\/p>\n<p>Peirce pointed out that this ambiguity means the LBRY blockchain could continue to exist, albeit on a more challenging path.<\/p>\n<p>The SEC initiated a lawsuit against LBRY in March 2021, accusing the company of selling unregistered securities, including to institutional investors and platform users, from 2016 to 2020.<\/p>\n<p>The SEC\u2019s lawsuit also alleges that its LBRY Credit token (LBC) qualified as a security under the 1933 Securities Act. The SEC had been investigating the blockchain-based publishing platform for three years, commencing its inquiry in May 2018.<\/p>\n<p>The SEC won the case in November 2022, and the presiding judge also ruled that LBC (LBRY Credits) was indeed a security.<\/p>\n<p>Originally, the SEC had requested a total <span data-preserver-spaces=\"true\">penalty<\/span> of $44 million, split evenly between a civil penalty and disgorgement, and sought a court order to halt further sales of LBC.<\/p>\n<p>However, recognizing that LBRY was unlikely to be able to pay the $22 million penalty, the SEC later asked the court to reduce the fine to $111,614, citing LBRY\u2019s financial difficulties and nearly defunct status.<\/p>\n<div class=\"newsletter home-newsletter single\">\n<div class=\"left-side\">\n<p>\n        <em><br \/>\n            Enter your email for our Free Daily Newsletter        <\/em>\n    <\/p>\n<p> A quick 3min read about today&#8217;s crypto news!<\/p>\n<p>    <span class=\"response-msg\" id=\"newsletter-response\"><\/span>\n<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>Read the full article <a href=\"https:\/\/cryptonews.com\/news\/sec-commissioner-hester-peirce-challenges-secs-actions-in-lbry-case.htm\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: iStock\/Pgiam Hester Peirce, a commissioner at the Securities and Exchange Commission (SEC), has expressed her strong disapproval of the agency\u2019s handling&#8230;<\/p>\n","protected":false},"author":1,"featured_media":6437,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[],"class_list":{"0":"post-6436","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-crypto"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ 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