Sh*coin-powered video platform that pretends to be decentralized gets the regulation hammer. This is why we use Bitcoin not crypto.

Sh*coin-powered video platform that pretends to be decentralized gets the regulation hammer. This is why we use Bitcoin not crypto.
jimmyhoke
0
0

Sh*coin-powered video platform that pretends to be decentralized gets the regulation hammer. This is why we use Bitcoin not crypto.

Summary Companies Law firms Related documents

Company said its credits were a cryptocurrency Judge ruled credits were sold as investments

(Reuters) - The U.S. Securities and Exchange Commission won its lawsuit against blockchain-based publishing company LBRY Inc on Monday when a U.S. judge ruled that the company offered its digital assets as securities.

The SEC sued LBRY last year, saying the New Hampshire-based company violated U.S. law by selling its LBRY Credits without registering them as securities.

U.S. District Judge Paul Barbadoro in Concord, New Hampshire ruled that no reasonable jury could reject the SEC's claim that LBRY offered the credits as an investment in its content distribution network.

LBRY CEO Jeremy Kauffman said the decision "threatens the entire U.S. cryptocurrency industry" by setting a standard that would deem "almost every cryptocurrency" a security.

A spokesperson for the SEC did not immediately have comment.

Judges have ruled in other cases that certain digital tokens were securities. LBRY argued that, unlike in those cases, its credits were functional as currency on its platform early on, allowing content creators to earn cash and accept tips.

Barbadoro wrote Monday that "nothing in the case law suggests that a token with both consumptive and speculative uses cannot be sold as an investment contract."

The judge also rejected LBRY's defense that it lacked notice that the law applied to it. The company had said its case was the first where the SEC alleged registration violations against an issuer of digital tokens that did not conduct an initial coin offering.

The credits had a market cap of $12.74 million on Monday according to Coinbase, a little more than half of what they were worth in March, before the implosion of stablecoin TerraUSD prompted a broader downturn in the cryptocurrency market.

The case is SEC v. LBRY Inc, U.S. District Court for the District of New Hampshire, No 1:21-CV-00260.

For the SEC: Marc Jones, Eric Forni and Peter Moores

For LBRY: John Dixon and Keith Miller of Perkins Coie; and William Christie and Timothy McLaughlin of Shaheen & Gordon

Read more:

Crypto company jokes about using garlic to ward off SEC

Our Standards: The Thomson Reuters Trust Principles.

Jody GodoyThomson Reuters Jody Godoy reports on banking and securities law. Reach her at [email protected]