At press time, LBRY Token had plunged to $0.009298 from a high of $0.01235 on July 11.
The plunge followed a ruling that LBRY Inc. violated US securities laws.
LBRY Inc. has stated that it is shutting down its business.
The LBRY Credits (LBC) fell by 24% early today as a result of a Federal Judge’s ruling that LBRY, Inc, the company that created the LBRY protocol, is responsible for breaking US securities laws. . LBRY was sued by the SEC in March 2021 for offering unregistered securities.
Following the final judgment, the company is permanently prohibited from selling unregistered securities unless it first registers with the US Securities and Exchange Commission (SEC). LBRY, Inc also has thirty days to pay a fine of $111,614.
Winding LBRY Inc. down
After the ruling, the decentralized content-sharing project LBRY Inc. was quick to announce its next steps stating that it working on winding down completely.
The final judgement in SEC vs LBRY is out.
In accordance with the court’s order and our promises, we expect to spend the next several months winding LBRY Inc. down entirely.
As to what happens to LBRY from here, well, that’s up to you. pic.twitter.com/cU8O3nATT6
— LBRY 🚀 (@LBRYcom) July 11, 2023
It’s crucial to note that the SEC never requested a total shutdown of the project, at least not in their initial complaint, despite the project’s announcement that it is closing. On the contrary, the regulator sought to prevent unregistered securities offerings of any kind and the return of “ill-gotten” profits from those activities, and civil penalties.
The SEC cited explicit statements on LBRY’s website that it was selling LBRY Credits (LBC) tokens to “financially support its operations” both through their protocol and on secondary markets, which refer to the buying and selling of tokens on platforms that aren’t the cryptocurrency’s original issuers. These statements were made during the litigation process.
Last year’s ruling against LBRY
In November last year, Judge Paul J. Barbadoro of the U.S. District Court of New Hampshire ruled against LBRY Inc. ruling that the project could not provide “any reasonable trier of fact that could reject the SEC’s claims.” As a result, LBRY Inc. declared they lost.
However, LBRY Inc. filed and won an appeal focusing on whether the secondary market sales of the LBC tokens should be included in an injunction the US SEC is seeking the court to approve.
After yesterday’s ruling, the company’s CEO, Jeremy Kauffman, tweeted that “neither the SEC nor the federal judge himself can tell me what the law allows and doesn’t allow,” adding that “all I’ve ever wanted to do is follow the law.”
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