The new target of US Security and Exchange Commission (SEC) is currently LBRY, Inc. A document was filed in the court of New Hamishpere, as SEC accused LBRY of failing to offer a security registration, just like in the case of Ripple.
According to the SEC complaint, the investors are seeking returns on the capital they have spent on LBRY. This is because the LBRY has sold millions on the securities known as LBRY credits for the funding of their product development and business. This company has allegedly exchanged tokens for non-cash compensation, on US dollars, and for Bitcoin.
The estimated volume, according to SEC, is about 13 million dollars from 2016, and by 2020, 5 million dollars were acquired in Bitcoin. The SEC claims the disgorgement of the funds by the corporate sector as unlawful conduct and stops LBRY from taking part in any such unauthorized digital asset security offerings.
By section 5(a) and 5(c) in the Security act of 1993, the SEC is demanding civil penalties along with the relief of injunction against the defendant. To handle this, the company has made a counterargument against the commission on these charges. They have denied the token LBCs as security and say that its use is a theory case based on the expertise and experience they got on the platform. They further added to this case about LBCs being new to the company, as they have been using tokens for multiple purposes long before LBCs introduction. The uses enlisted in their case were identity creation, purchasing, publishing, and content boosting.
Ripple and LBRY on the Same Page
On their Facebook page, LBRY has quoted about SEC wanting to criminalize all cryptocurrencies, predicting that it would damage the US crypto space. The LBRY has fought back and declared that SEC could block all digital assets like Ethereum itself and Ethereum Blockchain, which is further from the realities, as SEC back in 2018 pointed out that Ethereum was not a security.
Just like in the case of Ripple, LBRY believes that they have failed to settle with SEC, as it involved putting LBCs out of regulations.