Crypto firm LBRY files to challenge ruling it violated US Securities Law
- The SEC filed a lawsuit in a New Hampshire court arguing that LBRY’s LBC tokens were tokens and not cryptocurrencies.
- The SEC won a case in November 2022 and LBRY said that it would close.
- LBRY was also ordered to pay a fine of $111,614.
The cryptocurrency firm LBRY has announced its intention to appeal a previous New Hampshire court’s finding that it had neglected to register with the SEC. LBRY announced on its X (previously Twitter) account that it intended to appeal the decision.
LBRY has filed a Notice of Appeal against the SEC. pic.twitter.com/Zp9S0TP0Qw
— LBRY 🚀 (@LBRYcom) September 7, 2023
According to the 2021 SEC’s lawsuit, the blockchain-based file-sharing network sold native LBRY credits (LBC), without registering as a securities dealing company. LBRY has, however, insisted the sold LBC was not securities, and thus the company did not violate federal securities laws as claimed by the SEC.
The SEC was awarded a victory by a New Hampshire judge in November, and the final judgment was submitted on July 11. After the decision, LBRY said that it would close.
The court ordered LBRY to pay a $111,614 fine. The regulator decreased that from $22 million in May due to the company’s “near-defunct status.” Additionally, the corporation was “permanently restrained and enjoined from” directly or indirectly taking part in any unregistered crypto securities offering or breaking federal securities laws.
Similar SEC claims regarding the sale of $1.3 billion in XRP tokens had been made against blockchain company Ripple Labs. Legal professionals have argued that a federal judge’s ruling in favour of Ripple in July – that programmatic sales of XRP to retail investors through exchanges did not violate securities law, but direct sales of the cryptocurrency to institutional investors did – may give hope to other businesses involved in related cases.
