\u201cHow to Legally Launch a Public Blockchain in the US?\u201d LBRY Asks After Losing to SEC
A New Hampshire court ruled in favor of the Securities and Exchange Commission in its case against LBRY. LBRY was sued in March 2021 by the SEC as an issuer of unregistered “Digital Asset Securities.”
SEC Wins its LBC Case Against LBRY
This Monday, LBRY tweeted a simple “we lost” and an apology after a court decision ended its year-long resistance to the SEC’s claim they’ve offered unregistered securities. The crypto company was charged for its offering of the LBC token and the case is unlike most SEC actions as LBRY never conducted an initial coin offering (ICO).
LBRY tried to defend against the Securities and Exchange Commission by arguing they were denied due process due to the short notice and claimed LBC was not a security. The court, in turn, struck down all of the crypto company’s arguments calling them baseless. The decision lead LBRY to ask whether anybody even knows how to legally launch a public blockchain:
The most ****** up part of this whole situation is that even after five years of fighting and a court ruling, we still honestly do not know how to legally launch a public blockchain in the US.
Will LBRY’s Defeat Affect the Ripple Labs Trial?
While the SEC has been aggressively pursuing crypto companies for offering unregistered securities to the point of receiving pushback both from the public and the Senate, the case against LBRY is somewhat unusual. Most companies the Commission sued found themselves in hot water due to conducting an ICO.
The fact LBRY didn’t conduct an ICO links its case to the SEC vs. Ripple Labs trial. The Securities and Exchange Commission sued Ripple over its offering of the XRP utility token. This company’s defense is also, in part, hinging on the fact the SEC didn’t provide enough notice to allow for due process, and the fact XRP wasn’t offered in an ICO.
Ripple is, however, in a somewhat stronger position since September as it scored several victories in court. The Commission was ordered to hand the Hinman documents over to Ripple, and the XRP-issuer is seeing more and more support from other crypto companies in the form of the so-called amicus curiae briefs with Coinbase being the latest notable firm to file one.
This article originally appeared on The Tokenist
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