U.S. Securities and Exchange Commission has prevailed in a lawsuit against LBRY (a blockchain-powered publishing site). According to a New Hampshire district court ruling, Judge Paul Barbadoro agreed with SEC that the project’s native asset LBC was considered an investment contract or a transferable share representing a certificate of interest. On Twitter, LBRY said the language used to sway the court’s decision “sets an extraordinarily dangerous precedent.”
U.S. A Regulator is convicted of decentralizing blockchain platform LBRY
Court documents show that the Securities and Exchange Commission, the U.S. regulator, won a case in which it argued that LBRY had sold unregistered securities that were contrary to section 5 of 1933’s Securities Act of 1933. Furthermore, the SEC seeks injunctive relief from the alleged proceeds of LBRY’s LBC token.
Despite LBRY arguing that the blockchain token was not a security, but rather an essential component of the LBRY blockchain network, Judge Paul Barbadoro granted the SEC’s motion for summary judgment. The New Hampshire District Court’s approved summary judgment insists:
LBRY has misunderstood both the facts, and the law.
Unlike other crypto projects that have had an initial coin offering, LBRY has not. contends that the SEC’s decision and the language used in the summary judgment sets an “extraordinarily dangerous precedent.”
The dangerous precedent means that the U.S. regulator could make “every cryptocurrency in the U.S. a security, including Ethereum,” LBRY added. The LBRY Team disclosed that they plan to heal by licking their “wounds for a little bit,” but further added, “we’re not giving up.”
Many people are discussing the LBRY case and whether other crypto assets decentralized will also be subject to U.S. regulation. Gary Gensler the Chairman of the SEC stated during September 2nd that he would like the SEC’s crypto compliance to be fine tuned.
The regulator also remarked that out of “the nearly 10,000 tokens in the crypto market,” he believes “the vast majority are securities.” In mid-July, Gensler explained that the SEC was looking at “tokens, the stablecoins, and the non-stablecoins” as far as regulatory clarity is concerned.
Do you agree with the U.S. Securities and Exchange Commission’s victory in a lawsuit against LBRY, a blockchain publishing platform? Please comment below to let us know your thoughts on this topic.
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