- The SEC claimed in its complaint that LBRY offered and sold unregistered securities.
- LBRY acknowledges the verdict has the potential to impact the whole crypto sector.
It was revealed on Monday, along with a published copy of the judgement that the Securities and Exchange Commission (SEC) had prevailed in its action against LBRY, Inc., the business behind the LBRY protocol.
“We lost. Sorry everyone. We’re going to lick our wounds for a little bit but we’re not giving up.”
District Judge Paul J. Barbado noted the following:
“Because no reasonable trier of fact could reject the SEC’s contention that LBRY offered LBC as a security, and LBRY does not have a triable defense that it lacked fair notice, the SEC is entitled to judgment,” U.S.
Impact on Whole Crypto Sector
The SEC claimed in its complaint that LBRY “offered and sold unregistered securities in violation of Section 5 of the Securities Act of 1933,” which was the basis for the finding, according to the memorandum. LBC token “functions as digital currency that is an essential component of the LBRY Blockchain,” although LBRY maintains it is not selling securities.
LBRY insists it isn’t giving up just yet, but acknowledges the verdict has the potential to impact the whole cryptocurrency sector.
“The language used here sets an extraordinarily dangerous precedent that makes every cryptocurrency in the US a security, including Ethereum.”
However, the SEC has not issued a statement on the matter as of yet. In March 2021, the agency first initiated charges against LBRY for the sale of unregistered securities. Because, in his opinion, political participation by cryptocurrency proponents is “the only way we can make blockchain legal,” LBRY CEO Jeremy Kauffman is running for the Senate in New Hampshire.