The company behind blockchain publishing platform LBRY wrote its own obituary on Twitter yesterday after losing a fight with the SEC earlier this month.
In Monday tweets, LBRY, Inc. said it had been “killed by legal and SEC debts.” In a followup tweet, the company made clear that it is LBRY Inc that “must die” though the “LBRY protocol and blockchain will continue.”
Earlier this month, LBRY, Inc., which set up the LBRY protocol and blockchain, lost a year-long battle with the SEC.
LBRY, Inc. CEO Jeremy Kauffman told Decrypt that the company didn’t yet have an exact figure for the SEC fine but the regulatory body was pushing for $20 million in penalties.
The regulatory body said the company offered and sold unregistered securities in the form of LBRY tokens. LBRY, Inc. claimed their tokens weren’t securities but rather its native LBC token “functions as a digital currency that is an essential component of the LBRY Blockchain.”
Judge Peter Barbadoro on November 7 sided with the SEC.
“Since any information given privately to the SEC ends up leaking, we’d like to be upfront about the fact that LBRY Inc. will likely be dead in the near future,” the company said via Twitter yesterday.
It added: “We expect the LBRY mission to continue on, but the company itself has been killed by legal and SEC debts.”
LBRY is a blockchain-based platform that allows users to share video content without third-party intermediaries. It has in the past described itself as a decentralized YouTube of sorts and boasted of its lack of censorship on the platform.
LBRY, Inc. sold digital assets in the form of LBC tokens to fundraise for the platform from at least July 2016 to February 2021, the SEC said. In March of last year, the SEC alleged that LBRY received $12.2 million from the token sales—but didn’t register it as a security.
Experts previously told Decrypt that this ruling gives the SEC a leg up to—if it wants—label all cryptocurrencies securities and target digital asset exchanges like Coinbase in the future.
Kauffman said last month that “the SEC has very much demonstrated that they are out to damage or destroy the cryptocurrency industry in the United States.”
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