LBRY, the blockchain-based file-sharing and payment network, has taken an unexpected turn by resuming its battle against the United States federal regulator. This decision comes after facing a setback in November of the previous year.
The information LBRY initially considered winding down its operations. However, the company has decided to challenge a federal judge’s ruling from July, which favored the Securities and Exchange Commission (SEC).
On Sept 7, LBRY took a bold step. They filed a notice of appeal with the United States Court of Appeals for the First Circuit. The appeal challenges the final judgment issued on July 11, 2023. This judgment imposed a civil penalty on LBRY and prohibited them from engaging in future unregistered crypto asset securities offerings.
The notice indicated that defendant LBRY, Inc. is appealing the final judgment entered by this Court on July 11, 2023, to the United States Court of Appeals for the First Circuit.
The Securities and Exchange Commission (SEC) initiated legal proceedings against LBRY, Inc. in March 2021. They alleged that the company marketed its LBRY Credit token (LBC) as a security under the 1933 Securities Act. The U.S. took this action.
On Nov 7, 2022, the SEC won a verdict from the District Court for the District of New Hampshire. The court ruled against LBRY and prohibited them from offering unregistered cryptocurrency securities. As a result, LBRY was also fined $111,614 as a civil penalty.
LBRY’s Appeal: Defying Regulation In The Blockchain Space
RephraseThe initial penalty sought by the SEC was a substantial $22 million. However, theylater adjusted their position, recognizing that the now-defunct company could not afford such a significant sum.
In January, Jeremy Kauffman, the founder and CEO of LBRY, expressed a bleak outlook, stating that the future for the company appeared grim. He went as far as saying, “LBRY as a company is almost certainly dead.” Later on, following the July judgment, the company seemed to affirm this by announcing its intention to wind down its operations gradually.
LBRY’s recent decision hints at a potential shift in direction, signaling noteworthy triumphs in the crypto industry’s ongoing battles against federal regulation. However, this development follows prominent cases involving Ripple and Grayscale.
We attempted to contact LBRY for their comments, but unfortunately, we haven’t received a response up until the time of publication.
LBRY’s choice to contest the SEC’s ruling demonstrates its determination to challenge regulatory boundaries. However, this marks a significant development in the ongoing clash between blockchain-based ventures and government oversight.
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