Thomas Daniels
Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission (SEC), strongly criticized her colleagues for levying a $1.7 million fine on the decentralized finance protocol BarnBridge DAO. The protocol, along with its co-founders Tyler Ward and Troy Murray, consented to settle allegations of selling structured crypto asset securities called SMART Yield bonds.
The company agreed to return almost $1.5 million earned from these sales. Additionally, Ward and Murray were each required to pay $125,000 in civil penalties, as announced by the SEC.
Gurbir Grewal, an SEC director, stated, “The utilization of blockchain technology for unregistered offering and sale of structured finance products to retail investors is a violation of securities laws.” He emphasized that this case is a crucial reminder that securities laws apply to all market participants, regardless of their corporate structure or claims of decentralization or autonomy.
Peirce disagreed with the SEC’s decision to impose fines on Ward and Murray. She expressed her dissent on social media, noting that she voted against the action, though she hadn’t formally written a dissent at that time.
Peirce has a history of openly criticizing the SEC, particularly in relation to litigation. In 2022, she accused the agency of failing to properly regulate cryptocurrencies and criticized its inaction.
She commented on the SEC’s reluctance to engage constructively with the crypto community over the past four years, expressing disbelief at the SEC’s uncharacteristically puzzling approach to regulation.
Despite this, the SEC publicly insists that its existing securities framework is sufficient for governing crypto asset securities, ignoring calls for rulemaking in this area.
SEC Chair Gary Gensler has pointed out that the crypto field is plagued with fraudulent and manipulative practices, as well as money laundering.
