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Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission (SEC), criticized her colleagues for imposing a $1.7 million fine on decentralized finance (defi) protocol BarnBridge DAO.
BarnBridge DAO and its founders, Tyler Ward and Troy Murray, have agreed to settle charges related to the sale of structured crypto asset securities called SMART Yield bonds. As part of the settlement, the firm will disgorge nearly $1.5 million in proceeds from the sales, while Ward and Murray will each pay a civil penalty of $125,000, according to the SEC.
Gurbir Grewal, director of the SEC, emphasized that the use of blockchain technology for the unregistered sale of structured finance products to retail investors violates securities laws. He stated, “This case serves as an important reminder that those laws apply to all who wish to access our capital markets, regardless of whether they are, or purport to be, incorporated, decentralized or autonomous.”
Peirce disagreed with the SEC’s decision to fine Ward and Murray and expressed her dissent on social media. She stated, “Although I did not write a dissent (yet?), I voted against the action.” Peirce has been vocal about her criticism of the SEC in the past, particularly regarding cryptocurrency regulation. In 2022, she criticized the agency for its lack of action and wrote a scathing critique of its approach to regulation.
The SEC, on the other hand, maintains that its current securities framework adequately governs crypto asset securities and has denied additional petitions for rulemaking. SEC Chair Gary Gensler has emphasized the need to combat bad actors, fraud, manipulation, and money laundering in the crypto industry.
In related news, BarnBridge DAO has announced that it will halt operations amid a reported SEC investigation.
