LBRY is gearing up for another round of legal battles with the SEC.
LBRY, a blockchain-based file-sharing and payment platform, has filed an appeal against a court ruling that favored the US Securities and Exchange Commission (SEC) allegations.
On September 7th, LBRY made a legal move that surprised many, filing a notice of appeal with the United States Court of Appeals for the First Circuit.
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The company is seeking to overturn a July 11th judgment that had imposed a civil penalty and restricted LBRY from participating in future unregistered cryptocurrency asset offerings. The official notice read:
Defendant LBRY, Inc. now appeals to the United States Court of Appeals for the First Circuit this Court’s final judgment entered on July 11, 2023.
The appeal is the latest chapter in LBRY’s ongoing legal battles with the SEC, which commenced in March 2021 when the SEC alleged that LBRY's Credit token (LBC) was sold as a security, thus violating the 1933 Securities Act.
In November 2022, the US District Court for the District of New Hampshire sided with the SEC, barring LBRY from offering unregistered crypto asset securities and fining the company $111,614.
Interestingly, the SEC had initially sought a much larger penalty of $22 million but scaled it down upon recognizing that LBRY couldn't pay such a large sum.
The new appeal contradicted earlier rumors that LBRY was winding down its operations. LBRY CEO Jeremy Kauffman stated earlier this year, “LBRY as a company is almost certainly dead.” Following the July court ruling, the company tweeted:
In accordance with the court's order and our promises, we expect to spend the next several months winding LBRY Inc. down entirely.
The timing of LBRY's appeal is noteworthy, especially given the recent legal victories in the crypto industry, such as those won by Ripple and Grayscale Investments against the SEC.
LBRY’s decision to file an appeal marks a significant shift in its previous stance and offers a glimmer of hope for the platform’s future. It also adds to the broader narrative of cryptocurrency entities taking legal stands against regulatory judgments. Whether this move will yield a successful outcome for LBRY remains to be seen. However, it certainly adds another layer of complexity to the ongoing regulatory discourse in the crypto world.
