The Securities and Exchange Commission has won its case against LBRY, Inc., the company behind the LBRY protocol announced Monday along with a published copy of the ruling.
“We lost. Sorry everyone,” LBRY wrote on Twitter. “We’re going to lick our wounds for a little bit but we’re not giving up.”
“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. District Judge Paul J. Barbado wrote in the conclusion of the ruling.
We’re going to lick our wounds for a little bit but we’re not giving up.
We’ve got a bright team, tens of millions of pieces of content, hundreds of thousands of creators, and one of the most popular web3 apps in the world.
The best is yet to come 🚀
— LBRY 🚀 (@LBRYcom) November 7, 2022
According to the ruling’s memorandum, the SEC argued in its complaint that LBRY “offered and sold unregistered securities in violation of Section 5 of the Securities Act of 1933.” But LBRY does not believe it is selling securities, and countered that its LBC token “functions as a digital currency that is an essential component of the LBRY Blockchain.”
While LBRY says it isn’t throwing in the towel just yet, it does believe the ruling could affect the entire crypto industry.
“The language used here sets an extraordinarily dangerous precedent that makes every cryptocurrency in the US a security, including Ethereum,” LBRY wrote on Twitter in response to the ruling.
The SEC has not yet published a press release regarding the case.
This story is developing and will be updated.
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