SEC Wins Court Case Against Blockchain-Powered Platform – Team Says Loss Sets ‘Dangerous Precedent’
The Securities and Exchange Commission (SEC) has won a court case against the blockchain-based publishing platform LBRY. According to LBRY, the SEC’s victory sets “a dangerous precedent” for crypto regulation in the US.
The win for the American financial regulator means that LBRY’s token LBC is deemed a security, subject to US securities laws. And according to LBRY, the same would apply to “every cryptocurrency in the US […] including Ethereum.”
According to the ruling, which was shared online by LBRY, the blockchain publishing company did not have “a triable defense that it lacked fair notice” from the SEC.
“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,” the ruling, written by U.S. District Judge Paul J. Barbado, said.
In the court case, the SEC alleged that LBRY “offered and sold unregistered securities in violation of Section 5 of the Securities Act of 1933.” LBRY, on its side, argued that the LBC token is not a security, and called it instead “a digital currency that is an essential component of the LBRY Blockchain.”
LBRY shared the news of the ruling in a tweet to its more than 94,000 Twitter followers on Monday, saying, “We lost. Sorry everyone.”
“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 team added in a follow-up tweet. The team also made it clear that they are “not giving up” and warned other crypto projects that the ruling creates “an extraordinarily dangerous precedent that makes every cryptocurrency in the US a security.”
LBRY is a decentralized
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