The regulatory authority of the US, the SEC, has reduced the penalty imposed on LBRY, a decentralized content platform. Initially, the SEC had fined LBRY $22 million for allegedly misleading investors and selling unregistered securities. However, the SEC acknowledged that the hefty fine was unpayable for LBRY and opted to revise the penalty to $111,000.
LBRY had argued that its tokens were not securities and that the SEC’s case was based on a flawed legal theory. The revision of the penalty is a significant relief for LBRY, as it had faced the possibility of bankruptcy due to the hefty fine.
SEC Considers LBRY
The SEC has recognized LBRY’s financial limitations and has adjusted their penalty demand for the decentralized content platform that is no longer operational. Instead of the original $22 million fine, the SEC is now seeking a more realistic amount of $111,614, considering LBRY’s restricted financial means.
The regulatory body’s objective is to safeguard investors and uphold the integrity of the market through the prohibition of the Network’s involvement in unregistered offerings of crypto asset securities in the future.
The SEC’s submission not only suggests altering the fine but also urges a halt to Network’s unregistered digital asset securities offerings. The SEC anticipates that this restriction will prevent LBRY from engaging in activities that could further harm investors or destabilize the market.
Reason for $22 million Penalty
LBRY had been slapped with a hefty $22 million fine by the SEC on the grounds of supposedly vending unregistered securities and deceiving investors. The SEC had initiated a civil lawsuit against LBRY back in March 2021, alleging that the firm’s sale of LBRY Credits (LBC) went against securities laws.