LBRY, a network for sharing files and making payments using blockchain technology is taking legal action against the Securities and Exchange Commission (SEC) and has filed a notice of appeal against a federal judge’s ruling in July that favored the SEC.
A notice of appeal was filed by LBRY on September 7 to the United States Court of Appeals for the First Circuit.
The filing stated, “Defendant LBRY, Inc. now appeals to the United States Court of Appeals for the First Circuit this Court’s final judgment entered on July 11, 2023.”
The SEC charged LBRY in March 2021, alleging that the company sold its LBRY Credit token (LBC) without proper registration, which violated the 1933 Securities Act. The SEC argued that LBCs are investment contracts, which are subject to securities laws.
In November, a U.S. District Court in New Hampshire ruled in favor of the SEC, imposing a $22 million fine on LBRY and preventing them from engaging in unregistered cryptocurrency sales.
Originally the SEC had decided on a much bigger penalty of $22 million but reduced it to $111K realizing that the now-inoperative firm could not afford such an amount.
Jeremy Kauffman, the founder and CEO of LBRY, in January, said that “LBRY as a company is almost certainly dead.”
After the official judgment was issued in July, it appeared that the company admitted it, tweeting, “In accordance with the court’s order and our promises, we expect to spend the next several months winding LBRY Inc. down entirely.”