File-sharing protocol LBRY, once vanquished by the SEC, files to appeal previous rulings
The project's Twitter/X account has been revived to announce an appeal after the project was thought to be completely shuttered.
The decentralized file-sharing platform LBRY announced on Sept. 7 that it will continue to contest the results of a legal case initiated by securities regulators.
The U.S. Securities and Exchange Commission (SEC) initially filed charges against LBRY in 2021, alleging that it offered its LBC token as an unregistered security.
The agency eventually obtained a summary judgment in November 2022 that could have forced LBRY to pay a $22 million fine. However, LBRY went on to fight that outcome in the months that followed. The SEC eventually reduced LBRY’s fine to $111,614 in May 2023 due to the project’s lack of finances and its nearly defunct status.
The case seemingly concluded in July 2023 when LBRY announced a final judgment and said that it would start to wind down in the coming months. Though the project’s website remained active, its Twitter/X account stopped posting new content on July 27.
However, the account came back to life on Sept. 7, as the project announced that it had filed a notice of appeal against the SEC. The contents of that court filing indicate that LBRY will challenge the court’s earlier final judgment.
The positive news may have slightly benefited LBRY’s native token. The price of LBC rose from $0.0123 to $0.0128 within minutes on Sept. 8, marking a 4% price increase. However, this growth was insignificant overall: at the time of writing, LBC was down 5% over 24 hours, while the entire crypto market was down 0.9%.
Resistance to SEC is growing
LBRY did not state why it has chosen to fight the SEC further. However, the past several months have produced positive outcomes for other crypto firms engaged with the SEC. Ripple declared a partial legal victory in July, largely disproving SEC allegations that claimed its XRP sales constituted a securities offering. Though the SEC plans to appeal this result, Ripple’s early outcome may have motivated broader resistance.
Additionally, in August, Grayscale gained a partial victory against the SEC. That outcome will likely force the SEC to review Grayscale’s ETF application. However, Grayscale’s case is significantly different from others as it does not concern a token sale.