The US Securities and Trade Fee (SEC) is pursuing a revision of its $22 million penalty imposed on the decentralized content material platform LBRY.
Recognizing LBRY’s restricted capability to meet the high quality, the SEC submitted a request for amendments to the New Hampshire District Courtroom on Might 12. As a substitute of the preliminary $22 million, which allegedly represented the positive factors from LBRY’s LBRY Credit (LBC) token gross sales, the SEC proposed a lowered high quality of $111,614.
The fee cited LBRY’s near-defunct standing and lack of funds as the premise for the revision.
Along with the penalty discount, the SEC requested the courtroom to ban LBRY from conducting future unregistered choices of crypto asset securities.
Acknowledging LBRY’s representations of being defunct and ceasing operations, the SEC acknowledged the defendant’s incapability to pay a extra vital high quality, noting that the defendant’s monetary capabilities issue into figuring out civil penalties.
The SEC initially filed a civil lawsuit in opposition to LBRY in March 2021, alleging that the unregistered gross sales of LBC constituted securities choices. Alongside the $22 million disgorgement request, the SEC additionally sought an injunction to halt some other LBC gross sales by LBRY.
The SEC emerged victorious within the case in November 2022, with the presiding choose ruling that LBC certified as a safety.
In line with the SEC, proposing a lowered penalty was an try and strike a steadiness between the necessity for deterrence and LBRY’s monetary constraints.
LBRY’s criticism of SEC’s calculation and extreme demand
In a submitting submitted in December, LBRY contended that the SEC’s preliminary $22 million demand was exorbitant and ignored affordable operational prices related to their enterprise.
LBRY criticized the SEC’s calculation methodology as based mostly on tough estimations, claiming that the requested quantity lacked correct assist from the proof.
LBRY additional expressed considerations about its viability, warning that it will possible face monetary smash attributable to mounting authorized and SEC money owed. The declaration got here round a month after the SEC’s authorized victory in November 2022, suggesting a bleak outlook for LBRY’s prospects.
Because the SEC pursues a revision of the penalty in opposition to LBRY, the end result of this ongoing authorized battle could have vital implications for the decentralized content material platform and the broader crypto trade.
