The First Circuit Court of Appeals in Boston has instructed the blockchain-based platform LBRY to present its brief by November 1, 2023. This move comes after a prolonged legal tussle between the Securities and Exchange Commission (SEC) and LBRY over the nature of its LBRY Credit token (LBC).
SEC’s Change of Heart and LBRY’s Challenge
Initially, the SEC sought a hefty penalty from LBRY totaling $22 million. This penalty was based on claims that LBRY had gained this amount from selling its LBC token. However, understanding LBRY’s financial constraints and near-defunct status, the SEC reconsidered. Consequently, it revised the penalty amount to $111,614.
LBRY had contested the SEC’s calculations from the start, moreover, the firm labeled the initial figure as “vastly” exaggerated. Besides, they argued that the measures didn’t account for LBRY’s legitimate operational costs. Moreover, in December 2022, LBRY lamented about their likely shutdown, primarily due to legal burdens and SEC-induced debts.
A New Dawn for LBRY?
While many assumed the winding down of LBRY was imminent, events took an unexpected turn. Significantly, LBRY filed a notice of appeal this September since they aim to challenge a federal judge’s decision, which sided with the SEC.
Jeremy Kauffman, LBRY’s CEO, emphasized their decision to appeal was fueled by their belief that the SEC’s ruling was both “unjust and incorrect.” Additionally, he expressed concerns over the SEC potentially leveraging this ruling to hamper the more comprehensive cryptocurrency sector.
This move by LBRY aligns with a series of victories that the crypto realm has recently seen against federal oversight. Notable mentions include Ripple and Grayscale.
The ongoing LBRY and SEC saga highlights the evolving dynamics of the cryptocurrency industry and its relationship with regulatory bodies. With LBRY set to present its brief in November, all eyes will be on the First Circuit Court of Appeals in Boston.
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