LBRY to Resume Legal Battle with the SEC

Blockchain startup LBRY filed a Notice of Appeal in the U.S. District Court for the District of New Hampshire against a ruling dated July 11, 2023.

LBRY has filed a Notice of Appeal against the SEC. pic.twitter.com/Zp9S0TP0Qw

— LBRY ? (@LBRYcom) September 7, 2023

In March 2021, the U.S. Securities and Exchange Commission (SEC) filed suit against a decentralised content-publishing platform. The regulator accused LBRY of selling unregistered securities in the form of the LBC token in an ICO worth $11 million.

According to the startup’s CEO, Jeremy Kaufman, the agency has clearly demonstrated that it intends to “harm or destroy the cryptocurrency industry in the United States”.

In November, a court granted the SEC’s suit against LBRY. Later the Commission requested to reduce the civil penalty from $22 million to $111,614, explaining that the project would be unable to pay the initial demand due to “a lack of funds” and a “near-cessation of business” status.

Some experts drew parallels with the Ripple case. For instance, lawyer and adjunct professor of law Andrew Rossow stated that the verdict in the LBRY case could set a precedent for fintech firms.

The SEC and Ripple have been engaged in litigation since 2020. The Commission charged the firm with an unregistered sale of securities in the form of XRP totalling $1.3 billion.

However, in July 2023, the U.S. District Court for the Southern District of New York found that programmatic sales and other distributions of the token did not constitute offers or sales of investment contracts. Following this, the SEC filed an appeal.

In August, the regulator lost a second case against crypto-industry participants — the court granted Grayscale Investments’ motion to convert the company’s GBTC into an ETF, despite the Commission’s position.

Earlier, U.S. Representative Warren Davidson called for Gary Gensler’s removal as chair of the agency.