LBRY loses lawsuit against SEC
LBRY loses court case against SEC . The company is developing a blockchain of the same name that offers a decentralized alternative to YouTube. The dispute is strongly reminiscent of the dispute between Ripple and the supervisory authority.
LBRY vs SEC: What is it about?
On March 29, 2021, the US regulator SEC filed a lawsuit against LBRY Inc. The company has been developing a decentralized video delivery protocol since 2015. To do this, an application is provided under the same name, which bears a strong resemblance to YouTube.
LBRY started out with the intention of providing a better alternative to YouTube. Censorship and regulations there are felt to be superfluous and harassing.
The project’s economy includes the LBC token , fully named LBRY Credits . If a user wants to upload a video, an audio file, an image or a PDF, he has to invest LBC for it. The higher his investment, the easier it is for users to find the entry in the directory.
LBRY created some LBC in a premine. The SEC used this lead to file a lawsuit. According to the regulator, the cryptocurrency is an unregistered security.
Since November 7, it has been clear: the competent court will reach its verdict in accordance with the allegations made by the SEC.
What does LBRY’s loss to the SEC mean?
The legal dispute is strongly reminiscent of the dispute between the SEC and Ripple , which has not ended for almost two years. In both cases, the defendants defend themselves with the argument: “There never was an ICO!”
In the case of LBRY, however, it is now evident that this is not always a suitable excuse. Even LBC’s proof-of-work consensus mechanism failed to save LBRY from a conviction.
The company announces its defeat in court and writes:
We’re sorry folks. We have lost.
Then you explain to your followers:
We will not give up. We have an intelligent team, tens of millions of pieces of content, hundreds of thousands of users and one of the most popular Web3 apps in the world.
So the work on LBRY will not end. In fact, the platform has been able to garner attention especially under its web frontend Odyssey. Countless users outside of the industry are already represented there. This also includes projects by German and French public broadcasters such as Arte.
In addition to the simple design known from YouTube, the popularity was achieved primarily through unique functions that make it easier to switch from the industry leader. The question arises: What are the consequences of the judgment for LBRY?
Details on this are not yet known. Most likely, the US-registered company will have to settle for a fine for illegal securities trading.
Does the verdict against LBRY serve as a precedent?
The big concern of the US crypto industry is now: The verdict against LBRY could serve as a precedent. Jeremy Kauffman , Managing Director of LBRY explains:
The case threatens the entire crypto industry. According to this ruling, almost all cryptocurrencies, including Ethereum and Dogecoin, are securities. The future of cryptocurrencies in the US is now in the hands of an organization even worse than the SEC: Congress.
Scene lawyer John E. Deaton considers the verdict to be problematic. In his opinion, it does not represent applicable laws.
The verdict is a very bad decision. That’s why I’ve been talking about this case for a year. It is true that the judge’s reasoning would be a death knell for crypto in the US. But this is NOT the law.
Above all , LBRY criticizes the opacity of the current legislation. After years in the industry, it is still not possible to assess how a public blockchain can be legally started.