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 this case. To refresh people on the facts, @LBRYcom is a decentralized file-sharing platform, intended for that purpose. There's no deception here, and while there are possible arguments that file-sharing itself is a problem, none of those are specifically relevant to the SEC's case. Instead, the SEC had a problem with a token. To quote directly from Commissioner Pierce's statement: "One does not have to dig deep to find fraudulent crypto projects that sold tokens with promises that they did nothing to fulfill. This sad reality makes the Commission’s decision to bring a case against LBRY especially puzzling. LBRY’s approach was more conservative than the approach many other projects took. Here, the blockchain was up and running at the time most tokens were sold, and the Commission’s complaint did not allege, and the court did not find, evidence of fraud. LBRY built a blockchain to facilitate data sharing, afford greater control to content creators, and make censorship more difficult. LBRY created a popular platform on the blockchain for sharing videos and other media. The open-source LBRY blockchain was available for anyone else to use. Why go after a company that sold a token for a functioning blockchain with an established use when we could have pursued plenty of other projects that were outright frauds and did not attempt to comply with the securities laws? To make matters worse, the Commission took an extremely hardline approach in this case. For example, after winning on summary judgment, the Commission sought monetary remedies of $44 million and asserted that LBRY’s offer to burn all tokens in its possession was not sufficient assurance that LBRY would not violate the registration provisions in the future. The Commission’s requested remedies were entirely out of proportion to any harm. Indeed, the court stated during the remedies hearing that “the absence of fraud allegations, [and] the fact that there was some measure of uncertainty” regarding the application of the securities laws when LBRY commenced its offering were facts that “should be taken into account when considering a penalty.” After the remedies hearing, the Commission pared its penalty request back to a significantly lower $111,614, which the court approved." Footnotes removed by me. 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. @WarrenDavidson @RitchieTorres @twobitidiot @MattWalshInBos