Error. Page cannot be displayed. Please contact your service provider for more details. (29)
Last week, the Securities and Exchange Commission (SEC) filed a complaint against a blockchain-based file sharing and payment network called Lbry, accusing the US regulator Lbry Inc. of selling unregistered securities. However, Lbry’s CEO disputes that the project’s native tokens are securities and says the SEC’s logic would put some public blockchain projects at risk.
US regulator accuses Lbri of selling unregistered securities
U.S. financial regulators have filed a lawsuit against another blockchain project following allegations by the SEC that Lbry Inc. sold unregistered securities. The Securities and Exchange Commission has used the Securities Act of 1933 for a number of blockchain projects and now declares that LBC tokens are unregistered securities. The SEC alleges that the AML tokens were offered and sold as investment contracts, and thus as securities. Regulators say the company has pooled funds and that Lbry Inc. is also the largest owner of LBC.
According to SEC prosecutors, the company violated securities laws and should have registered AML tokens with regulators. The SEC is demanding a permanent injunction and repayment of the allegedly ill-gotten gains. The CEO of Lbry Inc. Jeremy Kaufman disagrees with the SEC’s complaint and pointed out in a recent interview that the company has not conducted an Initial Coin Offering (ICO). According to the logic of SEC….. Any blockchain in active development is at risk, especially Ethereum, Kauffman said.
CEO Lbri added:
As long as Ethereum developers are somehow coordinating by holding the token, they are at risk.
The CEO ofLbry says the case could cripple the crypto industry.
When the complaint was filed by the US regulator, discussions about it flared up on social media and cryptocurrency forums. I bet the real reason Lbri is being attacked by the SEC is not the stated reason at all, tweeted the host of the YouTube show Colin Talks Crypto. I bet it’s because Lbri offers censored videos that the government wants to censor. In 2020 and 2021, the Lbry platform swells after YouTube censored and de-censored a number of people for Covid 19 information and the recent Trump fiasco.
According to a recent interview with Jeremy Kaufman, he spoke with crypto and blockchain advocates to protest the SEC’s complaint. If Lbri loses the case, Kaufman insisted. This will cripple the cryptocurrency industry and create a huge incentive to set up these companies in the US. Any actively evolving cryptocurrency will likely require significant, expensive and intrusive regulatory compliance each time it is traded, he added.
What do you think about the Securities and Exchange Commission charging Lbri a fee for complaining about unregistered securities? Let us know what you think in the comments below.
Tags in this story
Blockchain, crypto assets, cryptocurrencies, Ethereum, ICO, initial coin offering, Jeremy Kaufman, Lbry Project, regulations, rules and sanctions, regulators, SEC, securities, unregistered securities
Photo credit: Shutterstock, Pixabay, Wiki Commons
Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of a product, service or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.