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- 1 LBRY, the blockchain-based company, lost the legal battle against the SEC in July 2023.
- 2 The company now seeks reconsideration of the court’s decision in the case of unregistered security sales.
The lawsuits between crypto entities and regulatory agencies are becoming the new normal given the rising numbers. Amid the cases going on and being discussed in mainstream conversations, the SEC vs. LBRY lawsuit has an update. In a recent development, the blockchain-based file sharing and payment service provider decided to counter the decision against it.
LBRY went to file an appeal notice to the United States Court of Appeals for the First Circuit on September 7, 2023. With the filing, the blockchain-based service provider seeks reconsideration of the court orders against it.
According to the court order, LBRY was made to pay a civil penalty and it had to shut down the offerings of “unregistered crypto asset securities.”
LBRY Seeks to Reopen the Case that Ended in 2022
The filing from the developer company came in the wake of reconsideration of the decision against it.
The United States Securities and Exchange Commission (SEC) filed a lawsuit against LBRY in March 2021. The regulator alleged that the sale of LBRY Credit token (LBC) was a selling of security under the 1933 Securities Act.
In November of that year, the U.S. District Court for the District of New Hampshire agreed to take a motion for summary judgment filed by the SEC against LBRY. The judgment refrained the firm from offering unregistered crypto asset securities sales.
Also, it charged a civil penalty of $22 Million earlier, which later dropped to $111,614 after the regulator realized the bleak financial condition of the company.
The legal defeat made LBRY fall down to the ground. Following the final decision from the court, the company announced winding up all the operations entirely in the coming months.
Did the Recent Crypto Wins Against SEC Pump Optimism?
The flip of LBRY from announcing openly for giving up and preparing to shut down the operations completely in the months ahead to file an appeal on the case coincides with the timing of other cases. Recently, Ripple and Grayscale like crypto entities saw wins in the cases against the SEC.
Moreover, the Ripple vs. SEC case has many similarities with the LBRY’s case against the regulator. The financial watchdog charged the payment protocol for selling XRP tokens citing it as the sale of unregistered securities.
LBRY finds the insight akin to their case and might have the hopes of winning as Ripple did.
If the plan works out and the company gets another chance, it will be vital for the beleaguered company to make a comeback and set up again.
However, legal experts also believe that every lawsuit is unique and different in nature. So the decision for different entities, despite the similarities in cause and reasons, could be different.
So, it is also possible that LBRY might not witness a win similar to Ripple’s. Until further updates, the fate of the blockchain-based service company remains in a dilemma.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
