Thread by @lex_node

An interesting response from LBRY to the SEC's lawsuit. LBRY tokens might be securities, but it's been almost 4 years since the DAO report and there is still no viable compliance path for launching a cryptonative token--truly unjust and unfair.

helplbrysavecrypto.com/faq

The context from the LBRY team shows that at least some SEC staff see LBRY tokens as being securities and essentially all transactions in LBRY tokens as being securities transactions. The SEC's filed complaint is more narrow and focuses on capital-raising LBRY sales by LBRY Inc.

The SEC is not helping the crypto industry figure out a way to comply with the securities laws. Recent SEC settlements have required the team to abandon the project & essentially make the token worthless. It seems LBRY was offered a similar settlement, but declined.

@HesterPeirce seemingly remains the only SEC figure willing to go out on a limb and make actual practical proposals for how token can be issued in compliance with securities laws, which is great. But she can't do it alone.

As I've explained before, I thought @HesterPeirce were a bit too liberal vis a vis U.S. securities law traditions. Nevertheless, there could certainly be more conservative compliance paths outlined, and certainly many devs & others would embrace nearly any clear compliance path.

The roots/aspirations of blockchain tech may be anarchic/libertarian, but many devs are just normal well-intentioned people who enjoy the technical challenges of the space and would gladly comply with disclosure requirements, lockups, etc., if only a clear viable path existed.

*Hester Peirce's *proposals* (omitted word)

Offering no viable path, and continuing to sue creators, was understandable at first while the SEC worked to figure out the space, but it is now inexcusable, unethical and violates core American jurisprudential principles of predictability and economic freedom.

The early ICO settlements required the ICO team to become an SEC-reporting company, not to "disable the tokens" & shut down. The SEC should go back to that approach, with a crypto-tailored reporting regime and a sufficient decentralization safe harbor for when reporting stops.

Really, this does not have to be so difficult or mysterious. Aside from the SEC, industry lobbyists also deserve some blame for trying to contort securities law into tortured rationales for total non-regulation instead of focusing on defining a practical compliance path.

Even former SEC Commissioner Grundfest--who is so conservative he was saying Bitcoin is a security not long ago--seems to think the SEC's approach is flawed and harms the investors it is supposed to protect.

theblockcrypto.com/linked/89164/f…