- Decentralized media site LBRY has been charged with selling securities by the SEC
- The commission claims that the 13 billion Library Credits (LBC) tokens sold by the company constitutes an unlicensed sale of securities
- LBRY argues that LBC tokens are not securities and has raised concerns that the case could impact the entire crypto space
Media hosting platform LBRY has become the latest cryptocurrency project to feel the wrath of the Securities and Exchange Commission (SEC) after the commission accused the company of using unlicensed securities through the Library Credits (LBC) tokens. The SEC claims that LBC tokens should be considered securities because of how they were sold, which LBRY argues would therefore render almost all cryptocurrencies as securities.
SEC: LBC Tokens Are Securities
In its complaint, the SEC alleges that, starting in 2016, LBRY “offered and sold millions of dollars’ worth of unregistered securities to investors” through its LBC token system, with LBRY claiming that the proceeds were going to be used to “fund its business and build its project”. However, the SEC says that LBC tokens were “offered and sold as investment contracts and, therefore, securities”, with LBC token buyers expecting “a return on their investment based on the entrepreneurial or managerial efforts of LBRY.”
LBRY Hits Back in Warning to Entire Crypto Space
In response to the charges, LBRY has called on the public to help them, setting up helplbrysavecrypto.com in order to offer their side of the story. The site makes the bold claim that, “The claims made in SEC vs. LBRY would destroy the United States cryptocurrency industry” and accuses it of “advancing an aggressive and disastrous new standard that would make almost all blockchain tokens securities.”
HELP US SAVE CRYPTO
The future of crypto in US is at risk.The SEC are suing us and saying LBC is a security – it’s not!https://t.co/ALAVmgDsDI#helplbrysavecrypto pic.twitter.com/bJIOOgXeyY
— LBRY (@LBRYcom) March 29, 2021
LBRY has also engaged in a social media campaign to raise awareness of the situation, claiming that “they brought the case against us because we’re the biggest”, which is an odd time to brag. Should they deny the claims and fight the case, LBRY faces returning the $5 million the SEC says they made from the sale of LBC tokens as well as a further fine.
LBRY is undoubtedly seeking legal counsel on the issue and we can expect an official response soon.
