LBRY concedes to total shutdown, citing loss to SEC and millions in debt
The company said the LBRY blockchain is open-source and could continue on in theory, but that it would die without users.
LBRY Inc., the developer of the LBRY blockchain, is shutting down services because it lost a lawsuit to the U.S. Securities and Exchange Commission (SEC), and it “has several million dollars in debts.”
In an Oct. 19 statement, LBRY explained that it owed several million dollars in debt to its legal team, private debtors, and the SEC. Additionally, the company said its executives, employees, and board members have resigned, while its assets, like Odysee, are being placed in receivership.
Meanwhile, this marks the company’s second declaration of its intent to cease operations. Its initial announcement in July revealed that it was in the process of “winding down” as mandated by the court’s order in its case with the SEC.
Last year, the SEC sued LBRY for violating federal securities laws by selling its LBRY credits (LBC) token. The regulator initially obtained a summary judgment that would have compelled LBRY to pay a hefty $22 million fine, which was subsequently reduced to a more modest $111,614.
While the company attempted a comeback last month by filing a notice of appeal against the regulator, its current decision means that the move has been halted, and its operations would finally shut down. It said:
“LBRY Inc. must die, there is no escaping this. It has lost a judgment to the federal government, has several million dollars in debts, and has pledged to shut down.”
News of the decision has negatively impacted the LBC token, which has tanked by more than 35% in the last 24 hours to $0.00748 as of press time, according to CryptoSlate’s data.
What happens to LBRY?
LBRY Inc. stated that the LBRY blockchain is a decentralized blockchain with open-sourced codes that might continue to operate if it is being used.
However, the company warned that:
“The LBRY network might die, too. Decentralization isn’t magic – it only works if enough people use it.”
LBRY blockchain is a decentralized file-sharing network that has over 1.7 million registered identities and more than 30 million pieces of published content. Odysee, a platform on the blockchain, is a leading decentralized social media site, surpassing competitors like Mastodon and BlueSky, with a monthly user base exceeding 6 million.