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LBRY Says Company Has Been ‘Killed by Legal and SEC Debts’

The company behind blockchain publishing platform LBRY wrote its own obituary on Twitter yesterday after losing a battle with the SEC earlier this month.

In Monday tweets, LBRY, Inc. said it was “killed by legal and SEC debt.” In a follow-up tweet, the company clarified that it is LBRY Inc that “must die,” although the “LBRY protocol and blockchain will live on.”

Earlier this month, LBRY, Inc., which set up the LBRY protocol and blockchain, lost a year long struggle with the SEC.

Jeremy Kauffman, CEO of LBRY, Inc. said Decrypt that the company did not yet have an exact figure for the SEC fine, but that the regulatory body was pushing for $20 million in fines.

The regulatory body said the company offered and sold unregistered securities in the form of LBRY tokens. LBRY, Inc. claimed that their tokens were not securities, but rather its native LBC token “functions as a digital currency that is an essential component of the LBRY Blockchain.”

Judge Peter Barbadoro sided with the SEC on Nov. 7.

“Since any information given privately to the SEC is eventually leaked, we would like to be upfront about the fact that LBRY Inc. will likely be dead in the near future,” the company said on Twitter yesterday.

It added: “We expect the LBRY mission to continue, but the company itself has been killed by legal and SEC debt.”

LBRY is a blockchain-based platform that allows users to share video content without third-party intermediaries. It has described itself in the past as a kind of decentralized YouTube and boasted about it lack of censorship on the platform.

LBRY, Inc. sold digital assets in the form of LBC tokens from at least July 2016 to February 2021 to raise funds for the platform, the SEC said. In March of last year, the SEC alleged that LBRY received $12.2 million from the token sale but did not register it as a security.

Experts before tell Decrypt that this ruling gives the SEC a leg up to — if it wants to — label all cryptocurrency securities and target digital asset exchanges like Coinbase in the future.

Kauffman said last month that “the SEC has shown plenty that they are out to damage or destroy the cryptocurrency industry in the United States.”

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