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The US securities regulator has been seeking to drastically reduce the fines courts are seeking to slam against LBRY, a blockchain-based file sharing and payments network that was sued in March 2021. The watchdog has alleged that the crypto startup’s original LBC tokens were unregistered securities.
Previously, the Securities and Exchange Commission (SEC) asked the court to fine LBRY $22 million for raising $11 million from its unauthorized offering. However, in court documents filed Friday, regulators asked the court to reduce that amount to $111,614, noting the company’s argument that “it was dysfunctional, stopped operations, and without funds to pay a larger fine.”
Meanwhile, in a new court filing, the federal watchdog is praying that the court “commands” or issues an order warning LBRY not to violate its provisions prohibiting the offering or sale of securities without registration. It noted that this request must be granted at least until the company “destroys the ownership of LBC and dissolves, as the Court stated it would do.”
Explaining the reasons for its request, the SEC argued that the file-sharing company’s alleged breach “was an ongoing endeavor that spanned more than five years and continued after this case was filed.” The US watchdog further claimed that LBRY’s behavior was “horrific” and “specifically meant to be.” [affect] or change the trading market for LBC.”
In addition, the SEC stated that the company has not acknowledged that its actions were unlawful. It added that crypto startups remain in a position to violate state securities registration laws.
LBRY Calls SEC Action “Disastrous”
The SEC began investigating LBRY in May 2018 and filed a complaint against the company in 2021. In the complaint, the securities regulator accused LBRY of selling unregistered securities to retail and institutional investors between 2016 and 2021.
Financial figure reported that LBRY had promised investors that it would facilitate a secondary trading market for its tokens in order for them to cash out their holdings just as demand and value of the token increases. In response to the SEC’s complaint, the company in a website write-up accused the SEC of “advancing an aggressive and disastrous new standard that would make all blockchain tokens a security.”
“Classifying all actively developed blockchain tokens as securities would be a bureaucratic nightmare for United States residents and businesses operating in the US,” LBRY wrote on its website, helplbrysavecrypto.com.
The US securities regulator has been seeking to drastically reduce the fines courts are seeking to slam against LBRY, a blockchain-based file sharing and payments network that was sued in March 2021. The watchdog has alleged that the crypto startup’s original LBC tokens were unregistered securities.
Previously, the Securities and Exchange Commission (SEC) asked the court to fine LBRY $22 million for raising $11 million from its unauthorized offering. However, in court documents filed Friday, regulators asked the court to reduce that amount to $111,614, noting the company’s argument that “it was dysfunctional, stopped operations, and without funds to pay a larger fine.”
Meanwhile, in a new court filing, the federal watchdog is praying that the court “commands” or issues an order warning LBRY not to violate its provisions prohibiting the offering or sale of securities without registration. It noted that this request must be granted at least until the company “destroys the ownership of LBC and dissolves, as the Court stated it would do.”
Explaining the reasons for its request, the SEC argued that the file-sharing company’s alleged breach “was an ongoing endeavor that spanned more than five years and continued after this case was filed.” The US watchdog further claimed that LBRY’s behavior was “horrific” and “specifically meant to be.” [affect] or change the trading market for LBC.”
In addition, the SEC stated that the company has not acknowledged that its actions were unlawful. It added that crypto startups remain in a position to violate state securities registration laws.
LBRY Calls SEC Action “Disastrous”
The SEC began investigating LBRY in May 2018 and filed a complaint against the company in 2021. In the complaint, the securities regulator accused LBRY of selling unregistered securities to retail and institutional investors between 2016 and 2021.
Financial figure reported that LBRY had promised investors that it would facilitate a secondary trading market for its tokens in order for them to cash out their holdings just as demand and value of the token increases. In response to the SEC’s complaint, the company in a website write-up accused the SEC of “advancing an aggressive and disastrous new standard that would make all blockchain tokens a security.”
“Classifying all actively developed blockchain tokens as securities would be a bureaucratic nightmare for United States residents and businesses operating in the US,” LBRY wrote on its website, helplbrysavecrypto.com.
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