In March 2021, the SEC filed a lawsuit against LBRY, claiming that the firm had sold LBC tokens in violation of the law by failing to register with the agency. And, that these tokens were, in fact, securities. In response, LBRY argued that their tokens were not securities and that the SEC violated the company’s right to due process by failing to provide fair notice that the sale of LBC was subject to securities law.
This Monday, a New Hampshire judge ruled that the cryptocurrency firm LBRY broke the law when it sold its native LBC coins without first registering with the U.S. Securities and Exchange Commission (SEC).
Federal Judge Paul Barbadoro, of the District Court for the District of New Hampshire, concluded by saying
“No reasonable trier of fact could reject the SEC’s contention that LBRY offered LBC as a security, and LBRY does not have a triable defense that it lacked fair notice.”
After the verdict was announced, LBRY’s official Twitter account heartfully tweeted that they had lost, and that they were sorry.
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.
The best is yet to come 🚀
— LBRY 🚀 (@LBRYcom) November 7, 2022
Pointing towards the full ruling in the SEC vs LBRY case, they further stated that,
The language used here sets an extraordinarily dangerous precedent that makes every cryptocurrency in the US a security, including Ethereum.