The US securities regulator is seeking a review of a $22 million sanction against decentralized content platform LBRY, acknowledging that it is unlikely to be able to raise the money to pay for it.
In a brief filed May 12 in New Hampshire district court, the Securities and Exchange Commission (SEC) requested amendments to its petition for appeal in its successful case against LBRY.
Instead of claiming the original $22 million – the amount that LBRY claims to have earned from the sale of its LBRY Credits (LBC) tokens – the SEC cited “a lack of funds and a near-disappearance situation” The court has been asked to impose a fine of $111,614. LBRY’s.
The request also asks LBRY to stop “making future unregistered offerings of crypto asset securities”.
The SEC said in the filing, “The Commission accepts LBRY’s statements that it has disappeared, ceased operations, and lacked the funds to pay the large fine, and acknowledges that the defendants’ payment The ability to do so is a factor in the imposition of the penalty.”
The SEC first filed a civil lawsuit against LBRY in March 2021, alleging that the company’s LBC sales were unregistered security offerings. It sought US$22 million in damages and asked the court to order LBRY to stop selling LBC.
The SEC won the case in November 2022, with the preceding judge also ruling that LBC was a security.
The SEC stated that the reduced fine was a compromise between “the need to balance the redress of the penalty with LBRY’s inability to pay”.
In a December filing, LBRY argued that the SEC’s $22 million request was unreasonable, as it was “grossly” overstated and “does not deduct any of LBRY’s legitimate business expenses.”
LBRY said the SEC’s calculation of the amount was “based on estimates” and that the amount requested was “simply not supported by the record.”
In December 2022, about a month after the SEC won the case the year before, LBRY said it was “likely to dissolve in the near future” because it was “being killed by the SEC and legal debt.”
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