The U.S. Securities and Exchange Commission (SEC) has filed suit against the decentralized content-publishing platform LBRY. The regulator accuses the blockchain startup of selling unregistered securities in the form of the LBC token.
According to the filing, since July 2016 LBRY offered digital assets ‘to numerous investors’, including U.S. citizens.
The regulator also noted that LBRY cooperated with a cryptocurrency market maker, which acted as an intermediary in the purchase and sale of LBC.
The platform’s team called the SEC’s allegations a threat to the industry and stressed that LBC tokens are not securities.
Lawyer Jeremy Hogan warned of risks to the industry, saying Ripple is “not the first and not the last”.
In December 2020, the SEC accused Ripple of selling unregistered securities in the form of XRP tokens.
In February 2021, the commission filed an amended version of the complaint, focusing on the actions of co-founder Chris Larsen and CEO Brad Garlinghouse. The latter called the regulator’s actions “regulatory overreach“.
Later, the SEC requested data from six banks on Larsen’s and Garlinghouse’s personal financial transactions over the past eight years.
Against this backdrop, a number of major crypto firms and platforms bailed from supporting XRP, among them — Coinbase and OKCoin, Galaxy Digital, Grayscale Investments, Bitstamp and MoneyGram. In March Ripple ended its cooperation with the latter.
In the same month, a lawyer for the SEC stated that the sale of XRP by exchanges and other venues does not violate the commission’s guidelines.
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