In the United States, the Securities and Exchange Commission is working on better regulation of the crypto industry. In recent years, it has engaged in a large number of arm wrestling against players in the sector. She had been investigating LBRY in particular since 2016 and eventually sued the startup. A New Hampshire court judge has just sounded the death knell for this case.
A “dangerous precedent” for the crypto industry?
At the final hearing in the case between the LBRY team and the SEC, a New Hampshire court judge ruled in favor of the US regulator. Remember that the SEC has kept the LBRY team in its sights for the past six years. According to her, the LBC, the native token of the ecosystem, is a security. She accuses LBRY of having sold unregistered titles for several million dollars in bitcoins in particular.
As part of the case, the SEC asked the judge for a permanent injunction prohibiting the marketing of LBCs. The regulator also asked the court to impose on LBRY a return of its revenues, via a compensation fund. LBRY has defended that she technically did not violate the texts. She added that her token, the LBC, functions as a digital currency, which is an essential component of the LBRY blockchain.
“We lost, sorry (…) The court decision could make all cryptos in the United States a security, including Ethereum. It sets a dangerous precedent for the crypto industry (…) LBRY wrote.
The team promises to bounce back
“ We are going to heal our wounds for a little while, but we are not giving up (…) The best is yet to come”said a note from LBRY.
Recall that LBRY is a blockchain-based file sharing and payment network. It powers decentralized platforms, mainly social networks and video platforms. For many, the platform is the YouTube of the blockchain.
As the verdict approached, the LBC was affected by the possibility of a victory for the government side. It has been down 35% in the past few days and 49% in the past 30 days, according to data from CoinGecko.
On social networks, this decision worries a large number of participants in the crypto market. They are concerned that this case law will be brought up in the current legal battles that involve the SEC. If so, the damage may be significant for cryptos.
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