LBRY, a blockchain-based file-sharing and payment network, has decided to fight back against the United States Securities and Exchange Commission.
The development sees LBRY go back on an earlier decision to wind down after a federal judge ruling that went in favor of the Securities and Exchange Commission.
LBRY Fights Back
In a post on X, LBRY stated it had filed a notice of appeal to the United States Court of Appeals for the First Circuit. LBRY is seeking to appeal the final judgment that was entered on the 11th of July. The federal judge sided with the United States Securities and Exchange Commission and ordered LBRY to pay a civil penalty. It had also barred the payment network from participating in future unregistered crypto asset securities offerings.
“Defendant LBRY, Inc. now appeals to the United States Court of Appeals for the First Circuit this Court’s final judgment entered on the 11th of July, 2023.”
The Case Against LBRY
The Securities and Exchange Commission had sued LBRY Inc. in March 2021. The federal regulator alleged that the network sold its LBRY Credit token (LBC) as a security under the 1933 Securities Act. The US District Court for the District of New Hampshire sided with the SEC, granting summary judgment against LBRY on the 7th of November. It barred the platform from offering any unregistered crypto asset securities and ordered it to pay a civil penalty of $111,614.
The Securities and Exchange Commission had initially sought a punishment to the tune of $22 million. However, it changed course after conceding that LBRY could not pay such a high penalty. The SEC had stated at the time,
“The Commission acknowledges LBRY’s representations that it is defunct, ceasing operations, and without the funds to pay a larger fine, and recognizes that a defendant’s ability to pay is a factor when imposing a civil penalty.”
A Change In Course
Following the case, LBRY founder and CEO Jeremy Kauffman had stated that the company was almost certainly dead.
“LBRY is a decentralized protocol used by tens of millions of people to share content without any disruptions despite the legal challenges. LBRY, as a company, is almost certainly dead. But Odysee, the most popular way to use LBRY, and the protocol itself, have a bright future.”
The firm also seemed to accept its fate, tweeting,
“In accordance with the court’s order and our promises, we expect to spend the next several months winding LBRY Inc. down entirely.”
However, the company’s recent move indicates a possible change in course and strategy. It also comes amidst a number of high-profile victories for the crypto space against the Securities and Exchange Commission. These include victories scored by Ripple and Grayscale.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.