LBRY, a blockchain-based file-sharing and payment network, is taking steps to reverse a federal judge’s ruling in July that favored the Securities and Exchange Commission (SEC). The company has filed a notice of appeal to the United States Court of Appeals for the First Circuit. This appeal is against the final judgment entered on July 11, 2023, which ordered LBRY to pay a civil penalty and prohibited it from participating in unregistered offerings of crypto asset securities in the future.
LBRY had been sued by the SEC in March 2021, with the regulator claiming that LBRY Credit token (LBC) was sold as a security under the 1933 Securities Act. The U.S. District Court for the District of New Hampshire granted the SEC’s motion for summary judgment against LBRY on November 7, resulting in the platform being barred from offering “unregistered crypto asset securities” and being ordered to pay a $111,614 civil penalty.
Initially, the SEC sought a fine of $22 million from LBRY, but later revised it after acknowledging that the defunct firm was unable to pay such a hefty amount. In January, LBRY’s founder and CEO, Jeremy Kauffman, stated that “LBRY as a company is almost certainly dead.” Following the final judgment in July, LBRY seemed to confirm this notion, expressing its intention to wind down the company entirely.
However, LBRY’s recent filing of an appeal suggests a potential change in course. This move comes amidst several recent victories for the crypto industry against the SEC, including Ripple and Grayscale. The outcome of LBRY’s appeal could have significant implications for the regulatory landscape surrounding crypto asset securities.
Cointelegraph reached out to LBRY for further comments on the matter, but as of the time of publication, no response had been received. It remains unclear what the future holds for LBRY and whether the company can successfully challenge the SEC’s position in court. The crypto industry as a whole continues to grapple with regulatory challenges, with the SEC playing a key role in shaping the legal framework. The outcome of LBRY’s appeal will undoubtedly be closely watched by industry participants and regulators alike.
In conclusion, LBRY is fighting against a federal judge’s ruling by filing an appeal to the United States Court of Appeals for the First Circuit. The company seeks to reverse the order that imposed a civil penalty and barred LBRY from participating in unregistered offerings of crypto asset securities. While LBRY initially acknowledged its impending shutdown, its recent appeal suggests a potential shift in its fate. The outcome of this appeal will have significant implications for the crypto industry and its regulatory landscape.
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