The United States Securities and Exchange Commission (SEC) plans to lower the $22 million penalty imposed on LBRY, a decentralized content platform, to $111,614. The SEC acknowledged that LBRY may not have sufficient funds to pay the original fine, which the regulatory body had imposed for allegedly creating unregistered securities offerings through LBC sales. The SEC requested an amendment to the plea for remedies filed against LBRY in May 2022.
The SEC noted LBRY’s claims that it ceased operations, lacks resources, and is defunct, and stated that the capacity to pay is considered while imposing the civil penalty. The regulatory body aims to balance deterrence against LBRY’s inability to meet the original financial demand for the reduced penalty. The SEC has requested the prohibition of LBRY from undertaking further unregistered offerings of crypto asset securities to address the issue.
The SEC’s complaint against LBRY in March 2021 alleged that the content platform had violated securities laws via unregistered securities sales. In November 2022, the presiding judge deemed LBC a security, leading to the conclusion of the case. The outcome of this case may affect the entire industry as negotiations over the penalty continue between the SEC and LBRY.
