{"id":86019,"date":"2023-10-20T16:51:52","date_gmt":"2023-10-20T13:51:52","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=86019"},"modified":"2025-09-13T02:52:37","modified_gmt":"2025-09-12T23:52:37","slug":"regulated-to-oblivion-blockchain-startup-lbry-shuts-down-after-sec-battle","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/regulated-to-oblivion-blockchain-startup-lbry-shuts-down-after-sec-battle\/","title":{"rendered":"Regulated to oblivion. Blockchain startup LBRY shuts down after SEC battle"},"content":{"rendered":"<p>The developer of the decentralized media platform Odysee \u2014 the startup LBRY \u2014 announced it would cease operations, citing \u201cmulti-million-dollar debts.\u201d Users drew comparisons with Ripple.<\/p>\n<blockquote class=\\\"twitter-tweet\\\" data-lang=\\\"en\\\">\n<p lang=\\\"en\\\" dir=\\\"ltr\\\">LBRY Inc. is winding down.<\/p>\n<p>The LBRY network is unaffected.<\/p>\n<p>Odysee and other assets will undergo a legal process to satisfy debts, but Odysee has a bright future ahead.<\/p>\n<p>Thank you to everyone who fought with us for online freedom.<\/p>\n<p>A final goodbye post is in the first reply.<\/p>\n<p>\u2014 LBRY ? (@LBRYcom) <a href=\\\"https:\/\/twitter.com\/LBRYcom\/status\/1715108834950123929?ref_src=twsrc%5Etfw\\\">October 19, 2023<\/a><\/p><\/blockquote>\n<p> <script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<blockquote class=\\\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\\\">\n<p>\u201cWe\u2019re winding down. The LBRY network is not affected. Odysee and other assets will undergo a legal process to satisfy debts, but the platform has a bright future ahead. Thank you to everyone who fought with us for online freedom,\u201d the team wrote in a farewell tweet.<\/p>\n<\/blockquote>\n<p>In March 2021, the U.S. Securities and Exchange Commission (SEC) <a href=\"https:\/\/forklog.com\/en\/news\/sec-files-suit-against-blockchain-startup-lbry\">filed suit<\/a> against LBRY. The regulator accused the startup of selling unregistered securities in the form of the LBC token as part of the <a href=\"https:\/\/forklog.com\/en\/news\/what-is-an-ico-and-can-you-profit-from-it\">ICO<\/a> for $11 million.<\/p>\n<p>In November 2022, Judge Paul Barbadoro of New Hampshire handed down a <a href=\"https:\/\/forklog.com\/en\/news\/court-rules-lbrys-tokens-are-securities\">ruling in favour of the regulator<\/a>.<\/p>\n<p>In May 2023, the SEC moved <a href=\"https:\/\/forklog.com\/en\/news\/sec-lowers-lbrys-civil-penalty-from-22-million-to-111614\">to reduce the civil penalty<\/a> on the LBRY verdict from $22 million to $111,614. The Commission acknowledged that the project had \u201cinsufficient funds\u201d to pay the initial amount and was \u201cnear to winding down the business.\u201d<\/p>\n<p>In September, the startup made <a href=\"https:\/\/forklog.com\/en\/news\/lbry-to-resume-legal-battle-with-the-sec\">an attempt to revive the litigation<\/a> with the SEC, but ultimately decided to close. According to the statement, liabilities to authorities, the legal team and private investors amounted to \u201cseveral million dollars.\u201d<\/p>\n<p>To satisfy these obligations, external managers are drawing on the startup&#8217;s assets (including Odysee), but this does not affect the LBRY blockchain as a decentralised open-source product, the team stressed.<\/p>\n<p>Throughout the SEC proceedings, the platform continued to publish content. According to CoinGecko, Odysee&#8217;s monthly audience was about 5.3 million unique users. This was the highest figure among decentralized social media.<\/p>\n<figure class=\\\"wp-block-image\\\"><img decoding=\\\"async\\\" src=\\\"https:\/\/lh3.googleusercontent.com\/O-psmx7SoVPSKUluBxNnKmIlvV85H4mwxDqXCT5iL7UF3RTMQqal_ZbLEXclYbOSJ8idOPUVO_jSHejUw3PBR9Hqi_qK0qRnmN0fILrogzMHQRguCGBrftnRF98ItL2-ZwKK_ghjy6YE4HTZDsGwG4M\\\" alt=\\\"Regulated to oblivion. Blockchain startup LBRY shuts down after SEC battle\\\"\/><figcaption class=\\\"wp-element-caption\\\">Data: CoinGecko.<\/figcaption><\/figure>\n<p>In LBRY noted that around 30 million items of content posted would continue to exist as blocks are mined on the network.<\/p>\n<p>The startup team rejected any further proceedings with the SEC. Immediately after the statement&#8217;s release, the entire LBRY leadership stepped down.<\/p>\n<blockquote class=\\\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\\\">\n<p>\u201cIt wasn&#8217;t a happy ending, but it was a happy journey,\u201d summed up the former CEO Jeremy Kauffman.<\/p>\n<\/blockquote>\n<blockquote class=\\\"twitter-tweet\\\" data-conversation=\\\"none\\\" data-lang=\\\"en\\\">\n<p lang=\\\"en\\\" dir=\\\"ltr\\\">it wasn&#8217;t a happy ending, but it was a happy journey <a href=\\\"https:\/\/t.co\/BxLPVdi2DR\\\">pic.twitter.com\/BxLPVdi2DR<\/a><\/p>\n<p>\u2014 Jeremy Kauffman ? (@jeremykauffman) <a href=\\\"https:\/\/twitter.com\/jeremykauffman\/status\/1715111373498139024?ref_src=twsrc%5Etfw\\\">October 19, 2023<\/a><\/p><\/blockquote>\n<p> <script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>Observers noted that LBRY&#8217;s shutdown coincided with <a href=\"https:\/\/forklog.com\/en\/news\/sec-drops-charges-against-brad-garlinghouse-and-chris-larsen\">another Ripple victory<\/a> in its lawsuit with the SEC. The regulator declined to press charges against co-founder Chris Larsen and CEO Brad Garlinghouse for securities-law violations.<\/p>\n<blockquote class=\\\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\\\">\n<p>\u201cRipple would have been in LBRY&#8217;s place if it hadn&#8217;t had the resources to fight the SEC,\u201d acknowledged by one XRP community member.<\/p>\n<\/blockquote>\n<blockquote class=\\\"twitter-tweet\\\" data-lang=\\\"en\\\">\n<p lang=\\\"en\\\" dir=\\\"ltr\\\">As we celebrate today&#8217;s XRP ruling, a less successful outcome by a blockchain sued by the SEC went under the radar.<\/p>\n<p>Today LBRY Inc shut down:<\/p>\n<p>1\u20e3 Background<\/p>\n<p>LBRY set out to become a decentralized, open-sourced digital content platform. <\/p>\n<p>In 2016 they released a token that would\u2026 <a href=\\\"https:\/\/t.co\/MVgPQbdXxQ\\\">pic.twitter.com\/MVgPQbdXxQ<\/a><\/p>\n<p>\u2014 Slorg (@SlorgoftheSlugs) <a href=\\\"https:\/\/twitter.com\/SlorgoftheSlugs\/status\/1715199311191888067?ref_src=twsrc%5Etfw\\\">October 20, 2023<\/a><\/p><\/blockquote>\n<p> <script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>Describing the saga of the startup&#8217;s litigation with the regulator, he concluded:<\/p>\n<blockquote class=\\\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\\\">\n<p>\u201cRegulated to oblivion.\u201d<\/p>\n<\/blockquote>\n<p>The expert noted that LBRY had attracted millions of users to its content platform, but XRP\u2019s market capitalisation was \u201cmuch larger\u201d than that of the startup&#8217;s token. A lack of resources doomed the project, Slorg conceded.<\/p>\n<blockquote class=\\\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\\\">\n<p>\u201cRipple would have been in LBRY&#8217;s place if it hadn&#8217;t had the resources to fight the SEC,\u201d \u2014 <a href=\\\"https:\/\/twitter.com\/XRP4FREEDOM\/status\/1715204883388018995\\\">acknowledged<\/a> by one XRP community member.<\/p>\n<\/blockquote>\n<p>A community representative using the alias Ashley PROSPER urged not to forget the damage the SEC has already inflicted on the crypto industry.<\/p>\n<blockquote class=\\\"twitter-tweet\\\" data-lang=\\\"en\\\">\n<p lang=\\\"en\\\" dir=\\\"ltr\\\"><a href=\\\"https:\/\/twitter.com\/hashtag\/XRP?src=hash&#038;ref_src=twsrc%5Etfw\\\">#XRP<\/a> <a href=\\\"https:\/\/twitter.com\/hashtag\/XRPCommunity?src=hash&#038;ref_src=twsrc%5Etfw\\\">#XRPCommunity<\/a><br \/>Whilst we celebrate another massive win for Ripple, let&#8217;s not forget the damage the SEC has already done to crypto. <a href=\\\"https:\/\/twitter.com\/LBRYcom?ref_src=twsrc%5Etfw\\\">@LBRYcom<\/a> has decided not to continue its appeal against the SEC and shut its doors for good today. However, with the rampant censorship on X and\u2026 <a href=\\\"https:\/\/t.co\/66tOS8L7Z7\\\">https:\/\/t.co\/66tOS8L7Z7<\/a> <a href=\\\"https:\/\/t.co\/6hr3GL6qpi\\\">pic.twitter.com\/6hr3GL6qpi<\/a><\/p>\n<p>\u2014 Ashley PROSPER (@AshleyPROSPER1) <a href=\\\"https:\/\/twitter.com\/AshleyPROSPER1\/status\/1715195368462286993?ref_src=twsrc%5Etfw\\\">October 20, 2023<\/a><\/p><\/blockquote>\n<p> <script async src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script><\/p>\n<p>\u201cGiven the rampant censorship on X and YouTube, I have a faint suspicion that the LBRY app and token will be revived\u2026 the phoenix will rise from the ashes,\u201d he added.<\/p>\n<p>As reported in September, the Web3 social network Voice from Block.one announced it would wind down operations. The platform, which had faced no regulatory complaints, cited \u201cuncertainties in the cryptocurrency market and NFTs.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The developer of the decentralized media platform Odysee \u2014 the startup LBRY \u2014 announced it would cease operations, citing \u201cmulti-million-dollar debts.\u201d Users drew comparisons with Ripple.<\/p>\n","protected":false},"author":1,"featured_media":86020,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[83,1150,1223],"class_list":["post-86019","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-business","tag-news-plus","tag-startups"],"aioseo_notices":[],"amp_enabled":true,"views":"93","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/86019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=86019"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/86019\/revisions"}],"predecessor-version":[{"id":86021,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/86019\/revisions\/86021"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/86020"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=86019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=86019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=86019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}