LBRY Inc. said that although the firm is on its final legs, the content platform’s underlying protocol and blockchain will continue.
In light of its recent court setback against the United States Securities and Exchange Commission (SEC), the company behind the decentralised content platform LBRY believes its days are limited.
The SEC first sued LBRY Inc. for its LBRY Credit (LBC) coins in March 2021, stating that the company had conducted unregistered securities offers since 2016.
A court ruled last month, on November 7th, that tokens are securities, dealing a severe blow to the sector and finally granting victory to the SEC.
On November 30, LBRY Inc. provided an update on the firm through Twitter, stating that the company “will likely be dead in the near future.” The underlying protocol and blockchain will continue to exist, however:
“We’d want to be forthright about the likelihood that LBRY Inc. may cease to exist in the near future. We anticipate that the LBRY purpose will continue, but the firm has been destroyed by litigation and SEC problems.”
LBRY Inc. effectively offers a blockchain-based alternative to YouTube with less restrictive content restriction standards. The site also permits direct LBC tips to content authors, as opposed to the conventional revenue-sharing arrangement for advertising.
In its complaint against LBRY, the SEC asserted that LBC was created only for speculation, whereas LBRY contended that the tokens provided essential utility functions for its platform, including tipping, posting, buying, and promoting video content.
Despite the SEC’s victory in court, LBRY intimated on Twitter earlier this week that settlement discussions with the federal agency have continued to be challenging.
In response to a post on its November 29 status update on ongoing talks with the SEC, the business said that it gave the SEC “all we had,” but this approach was refused.
James Filan, a defence attorney and former federal prosecutor, questioned if this was related to the SEC pursuing more stringent restrictions on future LBC sales.
“Let me guess. “They want a Consent Judgment that specifies that every transaction, even on secondary markets, constitutes a sale of a security,” he said.
Notably, Filan, who has 131,000 followers on Twitter, has maintained current on the LBRY issue owing to his extensive comments on the continuing conflict between the SEC and the founders of XRP, Ripple Labs.
Similarities between the lawsuits include the SEC’s strong efforts to get both LBRY and XRP recognised as securities in court. Given that these are some of the first significant crypto and securities-related court cases, the verdicts may serve as a benchmark for future decisions.
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