Crypto Startup LBRY Files Appeal After New Hampshire Court Ruling in SEC Case
Crypto News – The blockchain-based file-sharing network had announced its intention to wind down operations following a New Hampshire court’s ruling in favor of the U.S. Securities and Exchange Commission (SEC) last November.
A cryptocurrency startup called LBRY has officially submitted its appeal against a decision by a New Hampshire court, which found that LBRY had failed to register with the SEC.
In 2022, the SEC filed a lawsuit alleging that LBRY, the blockchain-based file-sharing network, had violated federal securities laws by selling its native LBRY credits (LBC). LBRY had argued that these credits were not securities, but a New Hampshire judge ruled in favor of the SEC in November. The final ruling was officially recorded on July 11, prompting LBRY to announce its intention to cease its operations.
As part of the ruling, LBRY has been ordered to pay a penalty of $111,614. This amount was reduced from an initial figure of $22 million in May, with the regulator taking into account the company’s “near-defunct status.” Additionally, LBRY is now “permanently restrained and enjoined from” engaging, either directly or indirectly, in activities that violate federal securities laws or involve unregistered cryptocurrency securities offerings.
Ripple Labs, a blockchain platform, is facing similar allegations from the SEC regarding the sale of $1.3 billion worth of XRP tokens. Legal experts have suggested that a federal judge’s ruling in July, which partially favored Ripple by determining that direct sales of XRP to institutional investors violated securities law while programmatic sales to retail investors through exchanges did not, may provide hope for other companies involved in similar legal battles.
LBRY expressed its intent to challenge the ruling through its X account (formerly Twitter) on Thursday. In response to the legal proceedings, the value of LBC has decreased by approximately 6% in the past 24 hours, according to CoinGecko data.