The Securities and Exchange Commission (SEC) filed a complaint against the blockchain-based file-sharing and payments network Lbry last week because US regulators charged Lbry Inc. with selling unregistered securities. However, Lbry’s CEO denies that the project’s native tokens are securities, saying the SEC’s logic will jeopardize a number of public blockchain projects.
The US regulator accuses Lbry of selling unregistered securities
US financial regulators have Filed a complaint Against another blockchain project, as the SEC claims, the company Lbry Inc. sold unregistered securities. The SEC used the Securities Act of 1933 to pursue a number of blockchain projects and it now states that LBC tokens are unregistered securities. The SEC says LBC tokens “were offered and sold as investment contracts, and therefore as securities”. Regulators say the company “pooled the money” and that Lbry Inc. is also the largest owner of LBC.
SEC prosecutors believe the company has violated securities laws and should have registered LBC tokens with regulators. The SEC seeks permanent disposition and disgorgation of alleged unlawful profits. Lbry Inc. CEO Jeremy Kauffman disagrees with the SEC’s complaint and stressed in a recent interview that the company did not have an initial coin offering (ICO). “According to the logic put forward by the SEC, every actively developed blockchain is at risk, especially Ethereum,” emphasized Kauffman.
Lbry’s CEO added:
As long as the Ethereum developers coordinate in some way while holding the token, they are at risk.
According to Lbry CEO, the case could cripple the crypto industry
When the complaint was filed by the U.S. regulator, discussions on the topic increased on social media and crypto forums. “I bet the real reason why Lbry is attacked by the SEC is not the stated reason at all,” said the host of the Youtube show Colin Talks Crypto. tweeted. “I bet that’s because Lbry is offering censorship-resistant video sharing of content that the government wants to censor.” In 2020 and 2021, the Lbry platform swelled after Youtube censored and deformed a number of people over Covid-19 information and the recent Trump fiasco.
According to Jeremy Kauffman’s recent interview, he spoke to crypto and blockchain supporters to rally against the SEC complaint. “If Lbry loses this case,” insisted Kauffman. “It will cripple the cryptocurrency industry and create huge barriers to building these businesses in the US. Any cryptocurrency actively developed would likely require significant, expensive, and intrusive regulatory compliance every time it is exchanged, ”he added.
What do you think of the SEC accusing Lbry of an unregistered securities complaint? Let us know what you think on this matter in the comments section below.
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