The Securities and Exchange Commission (SEC) has filed a civil suit against New Hampshire firm LBRY because it allegedly failed to register an offering of securities. The SEC Complaint states: “From 2016 through the present, LBRY offered and sold millions of dollars’ worth of unregistered securities to investors, in the form of a digital asset called LBRY Credits (‘LBC’), which LBRY told investors was to be used to fund its business and build its product – a digital content marketplace or network offering video and audio recordings, images, and other information (‘LBRY Network’).” At various times, LBRY represented to venture capital investors that it projected the LBC that it held itself would eventually be worth billions of dollars once it built the LBRY Network to its anticipated scale. LBRY’s defense is that the SEC doesn’t understand the LBRY token, its unit of crypto-whatever, thinking that it’s solely an investment tool. “We do not believe that the LBRY token is a security subject to SEC regulation. The LBRY Credit is a commodity that facilitates the LBRY protocol which thereby allows individuals to publish content, purchase content, tip creators, and boost content on the decentralized LBRY protocol,” LBRY says in its statement, which claims the suit could undermine “the blockchain and technology industry.”
JEFFREY NEWMAN REPRESENTS WHISTLEBLOWERS NATIONWIDE, INCLUDING COMPLAINTS RELATED TO CRYPTOCURRENCY AND BROKERAGE PLATFORMS. He can be reached at newmanshapiro.com 617-823-3217.