LBRY Shuts Down After Losing Legal Battle Against SEC

Updated: 20 October 2023

Disclosure

Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

Join Our Telegram channel to stay up to date on breaking news coverage

LBRY Inc, the company behind the LBRY blockchain, has shut down operations after accruing millions of dollars in debt fighting a lawsuit by the US Securities and Exchange Commission (SEC).

“LBRY Inc. has debts to the SEC, its legal team, and a private debtor that it cannot pay,” LBRY said. “All LBRY executives, employees, and board members have resigned. All will be doing what is required to satisfy any outstanding legal requirements, but no more.”

In a message on X, the company thanked those who supported its fight for “online freedom.“ The LBRY open-sourced blockchain network will continue to operate despite this setback, it said.

LBRY Inc. is winding down.

The LBRY network is unaffected.

Odysee and other assets will undergo a legal process to satisfy debts, but Odysee has a bright future ahead.

Thank you to everyone who fought with us for online freedom.

A final goodbye post is in the first reply.

— LBRY 🚀 (@LBRYcom) October 19, 2023

LBRY had initially said it would halt operations in July after losing its dispute with the SEC. The regulator had initially imposed a $22 million fine against the company over securities violations. The fine was later revised to $111,000, with the SEC claiming to understand LBRY’s financial woes.

The crypto community on X has reacted to the firm’s closure with criticism against the SEC. XRP lawyer John Deaton accused the regulator of bankrupting a small American company despite a lack of fraud or misrepresentation.

The LBRY case should be taught in law schools across the country, and not just regarding the application of the Howey Test to modern day blockchain technologies and crypto, but also to specifically highlight SEC overreach.

With @FTX_Official @CelsiusNetwork @investvoyager #Luna… https://t.co/5lvR5gSFyK

— John E Deaton (@JohnEDeaton1) October 20, 2023

Some users have also expressed their support towards LBRY’s former CEO, Jeremy Kauffman, who confirmed his departure from the project.

Ripple Scores A Major Win Against The SEC

On the other hand, Ripple has scored a major win against the SEC after the regulator dropped its lawsuit against two Ripple executives.

#XRPCommunity #SECGov v. #Ripple #XRP BREAKING: CASE DISMISSED AGAINST BRAD GARLINGHOUSE AND CHRIS LARSEN pic.twitter.com/BYTe9152jM

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) October 19, 2023

The agency is no longer pursuing action against Ripple’s CEO, Brad Garlinghouse, and co-founder, Chris Larsen, for allegedly violating federal securities laws.

XRP pumped after the news and is still up 7% in 24 hours. The crypto market more broadly was buoyed by the news with Bitcoin gaining by 5% to around $29,900.