Months after the start of the Ripple saga, the Securities and Exchange Commission (SEC) has sued blockchain-based platform LBRY, creating fears of further risk for the cryptocurrency industry.
The SEC filed a complaint against LBRY in the District Court of New Jersey on March 29th for, “failure to register an offering of securities pursuant to the Securities Act of 1993.”
According to the complaint, LBRY would have offered and sold millions of dollars worth of unregistered securities in the form of its cryptocurrency, violating the act in the process.
The complaint affirms that the assets sold by LBRY constitute securities due to them being sold and offered as investment contracts, as well as the dependence of the managerial efforts of LBRY directly affecting the returns on any investment.
As LBC tokens were sold as investment contracts in exchange for Dollars and cryptocurrencies, receiving more than $11 million in backing at the time of the offering, which was then used to pay or operational costs, this amounted to a breach of the securities Act of 1993.
According to court documents, the commission is seeking a permanent injunction preventing the platform from participating in “any unregistered digital asset securities offering”, as well as the payback of all “ill-gotten gains”.
LBRY Is Looking to Rally Community Support
Hours after the news of the SEC complaint against LBRy, the project published a tweet asking the community to “HELP US SAVE CRYPTO.” as “The future of crypto in the US is at risk.”, a concern shared by cryptocurrency advocates ever since the SEC’s move against Ripple labs.
HELP US SAVE CRYPTO
The future of crypto in US is at risk.
— LBRY (@LBRYcom) March 29, 2021
The Tweet links to the helplbrysavecrypto website, which aims to inform visitors of the risks that a classification of all…