LBRY files notice of appeal against court July decision that buckled the project

Blockchain-based content-sharing platform LBRY has filed a notice of appeal against a July court decision that sided with the SEC over alleged securities violations. 

The appeal, filed Thursday, seeks to challenge a ruling by the First Circuit Court’s final judgment, which imposed a fine on the company and restricted it from participating in future offerings.

It’s a change of pace for the embattled company, which had previously signaled an intent to wind down operations immediately following the court’s decision two months ago.

Initially, the SEC sought a penalty of $22 million against the company, alleging that its LBRY Credit tokens (LBC) were unregistered securities back in March 2021.

The commission, however, scaled back its demands to just over $111,000 in May of this year, citing the company’s “near-defunct” status and lack of funds, Blockworks previously reported.

A request for disgorgement, commonly used to reclaim ill-gotten gains, was withdrawn by the SEC.

Even though LBRY didn’t undertake a traditional initial coin offering, it still acted like a security by keeping tokens it created early on and then selling them later, the regulator argued at the time.

The court’s decision came as a blow to LBRY and its CEO Jeremy Kauffman, who have repeatedly argued that the classification of LBC as a security could endanger the broader US crypto market by establishing precedent.

LBRY’s own decision to appeal Thursday comes amid a series of victories for crypto industry firms including Ripple and Grayscale, who have also battled against federal regulatory judgments. 

Last month, Grayscale was granted a small victory in the DC Circuit Court of Appeals when a three-judge panel mandated the SEC review the digital asset management firm’s application to convert its flagship trust into a spot bitcoin ETF.

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.

blockworks.co

Leave a Reply

Your email address will not be published. Required fields are marked *