{"id":1747760,"date":"2022-11-08T08:31:14","date_gmt":"2022-11-08T13:31:14","guid":{"rendered":"https:\/\/platoaistream.net\/?post_type=station&p=1747760"},"modified":"2022-11-08T08:47:14","modified_gmt":"2022-11-08T13:47:14","slug":"sec-wins-lbry-lawsuit-alleging-tokens-are-unregistered-securities","status":"publish","type":"station","link":"https:\/\/platoaistream.net\/plato-data\/sec-wins-lbry-lawsuit-alleging-tokens-are-unregistered-securities\/","title":{"rendered":"SEC Wins LBRY Lawsuit Alleging Tokens Are Unregistered Securities"},"content":{"rendered":"
<\/div>\n

A federal judge ruled on Monday that blockchain-based file sharing platform LBRY violated securities laws.<\/span><\/p>\n

In a<\/span>\u00a0court filing<\/span><\/a> dated Nov. 7, U.S. District Judge Paul J. Barbado ruled in favor of the SEC, judging that LBRY unlawfully offered LBC tokens and failed to register them with the U.S. Securities and Exchange Commission (SEC).<\/span><\/p>\n

LBRY, or Library Credit, is a decentralized content hosting platform that claims to do \u201dto publishing what Bitcoin does to money.\u201d The native LBC token credits publishers when content consumers generate revenue. .<\/span><\/p>\n

The SEC took legal action against LBRY in March 2021, alleging that sales of the blockchain\u2019s native coin constituted an unregistered securities offering.<\/span><\/p>\n

LBRY refuted these claims and argued that the regulator did not give it enough notice about the registration requirement, thereby violating its right to due process.<\/span><\/p>\n

Judge Barbado ruled that \u201cno reasonable trier of fact\u201d could reject the SEC\u2019s claim, quashing LBRY\u2019s defense.<\/span><\/p>\n

His ruling also said that the SEC has based its claim on a straightforward application of a Supreme Court precedent federal courts have applied throughout the country for 70 years.<\/span><\/p>\n

\u201cWhile this may be the first time it has been used against an issuer of digital tokens that did not conduct an ICO, LBRY is in no position to claim that it did not receive fair notice that its conduct was unlawful,\u201d said Judge Barbado in his ruling.<\/span><\/p>\n

LBRY said the language used in the ruling \u201csets an extraordinarily dangerous precedent,\u201d for the crypto industry. The team<\/span> argued<\/span><\/a> that under these terms, every cryptocurrency, including Ethereum, would be considered a security in the U.S.<\/span><\/p>\n

The crypto protocol also said that the LBRY verdict also has consequences for crypto companies facing similar ongoing battles with the SEC. In Dec. 2020, the SEC took legal action against XRP-issuer Ripple Labs for violating the same securities laws with an unregistered token offering.<\/span><\/p>\n

\u201cThe standard the SEC advanced yesterday for what constitutes a security includes 99% of tokens. Whatever happens to LBRY (and Ripple), will affect the entire cryptocurrency industry,\u201d said LBRY in a<\/span> tweet<\/span><\/a> earlier this year.<\/span><\/p>\n","protected":false},"author":1,"featured_media":1747761,"template":"","meta":{"_eb_attr":"","type":"","auto_type":false,"post":"","stream":"","stream_url":"","waveform_data":[],"duration":0,"bpm":0,"downloadable":false,"download_url":"","purchase_title":"","purchase_url":"","post-count-all":0,"like_count":0,"download_count":0,"editor_note":"","copyright":"","captions":[]},"genre":[41],"artist":[15111],"mood":[],"activity":[],"station_tag":[3634,3884,14560,6428,3888,14557,4150,14559,5019,3767,4158,4302,3837,3646,4089,7661,14576,7457,14558,8453,12764,9642,14556,8593,14575,15098,7894,14555],"_links":{"self":[{"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/station\/1747760"}],"collection":[{"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/station"}],"about":[{"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/types\/station"}],"author":[{"embeddable":true,"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/users\/1"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/media\/1747761"}],"wp:attachment":[{"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/media?parent=1747760"}],"wp:term":[{"taxonomy":"genre","embeddable":true,"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/genre?post=1747760"},{"taxonomy":"artist","embeddable":true,"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/artist?post=1747760"},{"taxonomy":"mood","embeddable":true,"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/mood?post=1747760"},{"taxonomy":"activity","embeddable":true,"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/activity?post=1747760"},{"taxonomy":"station_tag","embeddable":true,"href":"https:\/\/platoaistream.net\/wp-json\/wp\/v2\/station_tag?post=1747760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}