LBRY to Appeal Securities Lawsuit Defeat

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  • LBRY has decided to file an appeal against the SEC’s decision that its LBC tokens were securities
  • The company was fined $22 million reduced to $111,000 earlier this year after it lost the case
  • LBRY’s appeal comes after a judge ruled that XRP tokens were not securities, providing new hope for the company’s legal battle against the SEC

LBRY, the blockchain publishing platform that was thought to be closing down following a judgement against it by the Securities and Exchange Commission (SEC) in November last year, has risen from the near-dead to file an appeal. The company announced in July that it was winding down operations following the $22 million fine it was handed last year, but in the wake of the SEC’s defeat against Ripple, the company has decided to give an appeal a shot. Its chances of success lie in the fact that Ripple’s XRP tokens were deemed to not be securities, although it’s unlikely that this will stand as precedent.

Ripple Case Gives LBRY Hope

The SEC sued LBRY in 2021 over allegations that it “offered and sold millions of dollars’ worth of unregistered securities to investors” through its LBC token system. LBRY fought the case but lost last November with the judge issuing a $22 million fine, but this was reduced to $111,000 in May given LBRY’s parlous financial position.

This seemed to have proved too much for LBRY to bear, which announced in July that its seven-year stay in the crypto world had come to an end. That seemed to be that, but following Judge Analise Torres’ ruling that XRP tokens didn’t constitute securities, LBRY seems to have gotten a second wind and appealed the ruling.

CEO Prepares for Second Battle

LBRY filed its appeal yesterday, with LBRY CEO Jeremy Kaufman saying in a written statement that the company is prepared to fight again:

LBRY is appealing the SEC’s decision because it is unjust and incorrect. The SEC has shown clear intent to use this ruling to damage the cryptocurrency industry more broadly. We won’t let them.

The case will be a good test to see how the SEC’s defeats against Ripple and Grayscale have damaged its standing over cryptocurrencies being securities.