Noted cryptocurrency advocate and Securities and Exchange Commissioner Hester M. Peirce issued a public dissent after the SEC levied a $6.1 million fine on online gaming and gambling platform Unikrn for conducting an initial coin offering (ICO) in 2017, a penalty that effectively amounts to the size of the company’s current assets.
- Peirce said that not only did she disagree with the SEC's finding Unikrn committed a registration violation, imposing a penalty that large will have a chilling effect on innovation on the part of other firms.
- "We should strive to avoid enforcement actions and sanctions, however, that enervate innovation and stifle the economic growth that innovation brings," the commissioner said. "I believe that this action and its accompanying sanctions will have such consequences."
- Peirce used the opportunity to try to gain support for her "safe harbor" proposal that would allow companies like Unikrn a three-year window to experiment and perfect their platforms without fear of running afoul of regulators in this new area of finance.
- "Imagine if such a regulatory safe harbor had been available to Unikrn," Peirce said. "Instead of permanently disabling its tokens as a result of today’s settled enforcement action, Unikrn, in concert with its token holders, might be devoting its time and resources to identifying new uses for the token and expanding its user base."
- "By failing to challenge ourselves to experiment with new approaches to regulation, we, and those whose interests we are pledged to serve, risk surrendering the fruits of innovation."