LBRY Inc to Close Operations After Final Judgement with SEC
LBRY Inc, the firm behind the LBRY protocol, has announced that it will shut down its operations following a final judgement in its case with the U.S. Securities and Exchange Commission (SEC). The SEC ruled that LBRY violated Section 5 of the Securities Act of 1933 in its issuance of the LBRY token (LBC). As a result, LBRY is permanently restrained from issuing any “security” without prior registration with the SEC. LBRY has also been ordered to pay a reduced fee of $111,614 within the next thirty days. The announcement caused a 14% drop in the value of LBC.
Key Points:
– LBRY Inc will wind down its operations after the final judgement in its case with the SEC.
– The SEC ruled that LBRY violated the Securities Act of 1933.
– LBRY is permanently restricted from issuing any “security” without prior registration with the SEC.
– LBRY must pay a reduced fee of $111,614 for its violation.
– The value of the LBRY token (LBC) dropped by 14% following the announcement.
LBRY is a decentralized content platform that includes the video-sharing platform Odyssey. The platform used LBC as its internal currency, allowing creators to charge viewers for streaming their content or receive tips. The SEC argued that one of LBRY’s stated uses for LBC was to financially support its operations, which indicated that it could be considered a security under the Howey Test. Judge Paul Barbadoro ruled in favor of the SEC, stating that LBRY offered LBC as a security. This ruling is believed to set a precedent for other crypto creators who may be concerned about the legality of their token issuance models.
Hot Take:
The final judgement against LBRY Inc by the SEC is a significant blow to the company and raises concerns for other crypto creators. The ruling highlights the SEC’s stance on token issuances and could have far-reaching implications for the industry. It underscores the importance of regulatory compliance and the need for clarity in the evolving crypto landscape.
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