LBRY, a file-sharing and payment network that utilizes blockchain technology, has made the decision to contest a federal judge’s ruling that favored the Securities and Exchange Commission (SEC). The SEC had accused LBRY of selling its LBRY Credit token (LBC) as a security, resulting in a court ruling in favor of the SEC. This ruling imposed a civil penalty on LBRY and prohibited the platform from engaging in unregistered crypto asset securities offerings.
On September 7th, LBRY officially initiated the process of appealing to the United States Court of Appeals for the First Circuit. This appeal aims to challenge the conclusive judgment that was issued on July 11th. In addition to the civil penalty, this judgment also prevented LBRY from participating in future unregistered crypto asset securities offerings. LBRY, Inc. filed a document stating their intention to pursue an appeal against the final judgment delivered on July 11, 2023.
LBRY’s decision to appeal indicates a change in direction from their previous announcement to wind down operations. In January, Jeremy Kauffman, the founder and CEO of LBRY, stated in an interview that the company was likely to be defunct. However, the recent appeal suggests a potential shift in course for the company.
The SEC vs. LBRY case has garnered significant media attention, but it has offered little insight into the SEC’s stance on tokens that serve dual purposes, combining utility and investment features. LBRY’s decision to appeal may shed light on this issue and could potentially result in a protracted and contentious legal battle.
LBRY’s appeal has received support from the XRP community, who anticipate a favorable outcome in LBRY’s battle against the SEC. Attorney Bill Morgan expressed his support and voiced doubts about the previous judgment. Prominent figures within the XRP community, including attorney John E. Deaton, have also rallied behind LBRY’s legal move. This united response from the cryptocurrency community represents a significant moment as they seek to counter the SEC’s actions targeting the crypto industry.
LBRY’s appeal adds to a series of notable challenges within the cryptocurrency industry against federal regulators, such as the ongoing Ripple case. These legal battles highlight the need for clarity and regulatory certainty in the industry.
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In conclusion, LBRY has chosen to contest a federal judge’s ruling by initiating an appeal against the SEC’s judgment. This appeal aims to challenge the penalties and restrictions imposed on the platform. LBRY’s decision indicates a potential change in direction for the company and has garnered support from the XRP community. This appeal adds to the growing number of legal battles within the cryptocurrency industry and highlights the need for regulatory clarity.
