The company behind blockchain publishing platform LBRY wrote its own obituary on Twitter yesterday after losing a battle with the SEC earlier this month.
In Monday’s tweets, LBRY, Inc. said it had been “killed by legal and SEC debt.” In a follow-up tweet, the company made it clear that it is LBRY Inc that “must die” although “the LBRY protocol and blockchain will continue.”
Earlier this month, LBRY, Inc., which set up the LBRY protocol and blockchain, lost one year-long struggle with the SEC.
LBRY, Inc. CEO Jeremy Kauffman said Decrypt that the company did not yet have an exact figure for the SEC fine, but the regulator was pushing for $20 million in fines.
The regulatory body so the company offered and sold unregistered securities in the form of LBRY tokens. LBRY, Inc. claimed that its tokens were not securities, but that its original LBC token “functions as a digital currency that is an important component of the LBRY Blockchain.”
On November 7, Judge Peter Barbadoro sided with the SEC.
“Since all information provided privately to the SEC ends up being leaked, we would 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, but the company itself has been killed by legal and SEC debt.”
LBRY is a blockchain-based platform that allows users to share video content without third-party intermediaries. It has previously described itself as a kind of decentralized YouTube and boasted about it lack of censorship on the platform.
LBRY, Inc. sold digital assets in the form of LBC tokens to raise money for the platform from at least July 2016 until February 2021, the SEC said. Last March, the SEC alleged that LBRY received $12.2 million from the token sale – but did not register it as a security.
Experts in the past told Decrypt that this ruling gives the SEC a leg up to — if it wants to — label all cryptocurrency securities and target digital asset exchanges like Coinbase in the future.
Kauffman so last month that “the SEC has very much demonstrated that they are out to harm or destroy the cryptocurrency industry in the United States.”
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