Hester Peirce slams SEC enforcement action against LBRY, saying token projects lack clear path to registration

U.S. SEC Commissioner Hester Peirce issued a statement on Friday saying that the SEC has taken many disturbing encryption enforcement actions, but the LBRY case is particularly disturbing and disappointing. Hester Peirce does not support the SEC's lawsuit against LBRY, but she was unable to express this view publicly during the LBRY case. After a U.S. federal district court ruled against LBRY over whether its token sale was an unregistered securities offering, LBRY announced last week that it would not appeal the decision. LBRY announced that the company would be closed and its assets would be taken over and used to repay debts, including civil penalties to the SEC. Peirce said that despite the SEC’s claim that it is clear that securities laws apply to token projects, this is not the case. She said there is no clear path for companies like LBRY to register their utility token offerings. Even if a company does successfully register its token offering, this does not completely avoid SEC enforcement action. Peirce added that compliance is important to investors. (The Block) According to previous news on October 20, the blockchain-based file sharing network LBRY announced that LBRY Inc. will be closed and its decentralized code will be open sourced, and subsequent development will be decided by users. LBRY Inc. has unpayable debts to the SEC, its legal team and private debtors. Its assets, including Odysee, are undergoing administration. All LBRY executives, employees and board members have resigned. In March 2021, the SEC filed a lawsuit against LBRY, accusing it of violating securities laws by selling LBC tokens; in November 2022, a U.S. judge ruled in favor of the SEC in this case; in January this year, the SEC reached a settlement with LBRY, admitting that it violated securities laws at the second level The sale of LBRY native token LBC on the market does not constitute a securities transaction. In addition, the judge stated that his ban did not apply to secondary market sales; in May this year, the SEC applied to the court to change the US$22 million fine against LBRY to approximately US$110,000.