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- 1 Securities Exchange Commission revised their $22 million penalty on LBRY to only $111k
- 2 The step was taken considering the company is in a near-defunct status
- 3 LBRY pleaded that the company would die with legal and SEC debts if not considered
The United States securities regulator has decided to revise the $22 million dollar punishment on the decentralized content platform LBRY. The regulators have reached this conclusion after considering the fact that the platform cannot pay the original amount that it was served with.
For our viewers understanding, let’s first give you a brief about what the content platform is.
What is the LBRY platform?
LBRY, also pronounced as (library), is a blockchain-based platform. It allows file-sharing and payment networks for decentralized platforms that are into social networks and video platforms. Along with LBRY, another company was formed by its creators known as Odysee. Odysee, which is an open-source video-sharing website, also uses the same network as LBRY but was later split into a different company on October 1, 2021.
CEO of LBRY, Jeremy Kauffman, describes companies built on LBRY (example-Odyssey) as decentralized and fringe alternatives to Youtube. The company believes that the video platforms built on LBRY support free speech, and Odysee is one of them. Odysee allows all kinds of videos on its platforms but delists videos that contain pornography, promotion of violence, or terrorism.
However, delisted videos are available on the platform’s blockchain datastore.CEO Jeremy Kauffman, who is also a libertarian activist, believes in providing people with the content of their choice and providing an alternative to Youtube.
Why did the SEC reduce the penalty?
The Securities and Exchange Commission sought to amend its penalty request against LBRY on May 12, filing in the New Hampshire District Court. The commission has revised the original amount of money that it sought from LBRY, which was $22 million.
The Exchange said that LBRY gained $22 million from the sale of its tokens LBRY Credits(LBC), but the SEC asked the court to impose a fine of only $111,614 on LBRY considering the fact that LBRY lacks funds and it is currently in a near-defunct status.
The SEC said in its filing that the commission acknowledges the current position of LBRY and its inability to pay a larger penalty. It added that a defendant’s ability to pay is a factor when imposing a civil penalty. The SEC has also asked to stop LBRY from “conducting future unregistered offerings of crypto asset securities.”
The SEC first filed a suit against LBRY in March 2021 asking to stop the sale of its unregistered security offerings. The SEC won the case in November 2022 and imposed a fine of $22 million on LRY and requested to stop any further sale of such unregistered tokens.
The SEC later revised their penalty saying that the company is in a bad financial state and cannot pay such a huge amount. In a December filing, after losing the case LBRY said that SEC’s $22 million claim is unreasonable and failed to “deduct any of LBRY’s legitimate business expenses.”
LBRY further added that SEC’s calculation and the penalty imposed were simply based on rough and back-of-the-envelop math. In the December 2022 filing, LBRY said that if the penalty continued the company would die in the near future with legal and SEC debts.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
