LBRY charged with sale of unregistered securities by SEC
2 min readTL;DR Breakdown
- LBRY charged by SEC.
- The defendant says it has done no wrong.
- They appeal to Americans to help save the cryptocurrencies.
SEC moves against LBRY
The US regulatory agency, the Securities and Exchange Commission (SEC) has charged LBRY, for violating securities. SEC stated on its website that LBRY did not submit a statement of registration, thus keeping away vital info necessary for such public offering form the knowledge of its would-be investors. SEC said LBRY had, for a period of four years beginning from 2016, offered for sale more than 13 million LBC coins to their customers. They were alleged to have realized over $11 million from various assets.
SEC is accusing LBRY of non-compliance with registration procedures as provided in Sections 5(a) and 5(c) of the Securities Act of 1933. The SEC is requesting for a permanent relief of injunction together with civil penalties against the defendant.
To determine whether an asset is security or not, SEC relies on the rather archaic Howey Test. This almost 70 year old test makes it hard to classify assets such as cryptocurrencies.
LBRY fights back
The SEC is once again accusing a crypto firm of misdeed. And like Ripple, the defendant is maintaining its innocence with the aid of its community. LBRY had launched a few petitions and is calling on the US public to help save cryptocurrencies. They stated that the SEC’s stance is capable of wrecking the US crypto industry.
On its Facebook page, the company said the SEC wants to criminalize almost all cryptocurrencies and it would hurt the US crypto space. The statement said that this could spill over to other virtual assets on ETH blockchain and ETH itself. This however is not true, as SEC has far back in 2018 stated that ETH isn’t a security.
Ripple too has a pending case with SEC. Ripple is alleged to have carried out an initial coin offer (ICO). Ripple is vehemently fighting the allegation. The case may be closed out by June.
