Cryptocurrency startup LBRY has announced its intention to appeal a New Hampshire court ruling that found it violated US securities law by failing to register with the US Securities and Exchange Commission (SEC).
Cryptocurrency Firm LBRY Plans to Oppose SEC Decision on Securities Law Violation
The SEC filed a lawsuit in 2022, arguing that LBRY's sale of local LBRY loans (LBC) constituted a violation of federal securities regulations.
LBRY claimed that LBC was not a security. However, a New Hampshire judge sided with the SEC in November, and the final decision was officially recorded on July 11. In response to the decision, LBRY initially announced that it planned to cease operations.
According to the ruling, LBRY is required to pay a penalty of $111,614. In addition, the company is permanently restricted and barred from engaging in activities that directly or indirectly violate the federal securities laws or unregistered crypto securities offerings.
This development is in line with the SEC's similar allegations against blockchain platform Ripple Labs for its $1.3 billion XRP token sale.
Legal experts said a federal judge's decision in favor of Ripple in July, which found that direct sales of XRP to institutional investors violated securities laws but scheduled sales to retail investors through exchanges did not, could potentially provide encouragement to other firms involved in similar legal battles.
*Not investment advice.