- The SEC has sued LBRY, a blockchain-based file-sharing and payment network.
- The lawsuit claims that LBRY sold LBC tokens without registering with the SEC.
- The decision was made on Monday by Federal Judge Paul Barbadoro of New Hampshire.
The U.S. Securities and Exchange Commission (SEC) has sued LBRY, a blockchain-based file-sharing and payment network. The lawsuit, filed in March, stated that LBRY violated the laws of securities by selling its native LBC tokens without registering with the SEC.
The decision was made on Monday by Federal Judge Paul Barbadoro of the District Court of New Hampshire, who stated that “LBRY does not have a triable defense that it lacked fair notice” and that “no reasonable trier of fact could reject the SEC’s contention that LBRY offered LBC as a security.”
LBRY, who lost the battle, took to Twitter to share the update:
We’re going to lick our wounds for a little bit but we’re not giving up. 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
Coupled with this, LBRY wrote in its filing that it did its part by informing some potential purchasers of LBC that the company was not offering its token as an investment. However, a disclaimer cannot change the transaction’s actual economic reality.
Comparatively, BitBoy founder Ben Armstrong wrote on Twitter that he assumes the XRP vs. SEC lawsuit will likely remain unaffected by the ruling of LBRY, though the accusations have been the same. According to James K Filan, LBRY offered LBC as a security, which fails the Fair Notice Defense.
$XRP/Ripple case is not affected by $LBRY case in my opinion. The main reason I actually have even more confidence in them.A couple months ago, everyone was shocked the Ripple didn’t use Fair Notice Defense in Summary Judgment. In the $LBRY case, this defense failed.1/2— Ben Armstrong (@Bitboy_Crypto) November 7, 2022
CryptoLaw founder John E Deaton also commented on the ruling, stating “This, unfortunately, is a total win for the SEC, as the judge does not distinguish secondary market sales independent of LBRY or future sales versus past sales.“
As a result of the judge’s decision on Monday, LBRY’s case will not proceed to trial. However, as per the decision, a status conference will be scheduled to address any outstanding problems in the SEC vs. LBRY case scheduled for November 21.
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