LBRY Inc Shuts Down Operations After Lawsuit
LBRY Inc, the company behind the LBRY blockchain, has ceased operations due to the accumulation of millions of dollars in debt resulting from a lawsuit filed by the US Securities and Exchange Commission (SEC). The company has stated that it is unable to pay its debts to the SEC, its legal team, and a private debtor. Consequently, all LBRY executives, employees, and board members have resigned. However, despite this setback, the LBRY open-sourced blockchain network will continue to operate.
Ripple Secures Victory Against SEC
In contrast to LBRY’s situation, Ripple has achieved a significant victory as the SEC dropped its lawsuit against two Ripple executives. The agency is no longer pursuing action against Brad Garlinghouse and Chris Larsen for alleged violations of federal securities laws. This development has had a positive impact on XRP, which experienced a 7% increase within 24 hours. The broader crypto market also responded positively, with Bitcoin gaining 5% and reaching approximately $29,900.
Reaction from Crypto Community
The closure of LBRY has drawn criticism from the crypto community, particularly towards the SEC. XRP lawyer John Deaton accused the regulator of bankrupting a small American company without evidence of fraud or misrepresentation. Additionally, users have expressed support for LBRY’s former CEO, Jeremy Kauffman.
Hot Take: Ripple’s Legal Win Highlights SEC Overreach
Ripple’s victory over the SEC not only marks a significant moment for the company but also sheds light on what some perceive as SEC overreach. The outcome of this case should be studied in law schools across the country to better understand how the Howey Test applies to modern blockchain technologies and crypto. It also serves as a reminder of the potential consequences of regulatory actions on small businesses in the crypto industry.
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