Introduction
LBRY, a blockchain-based media platform, has filed a notice of appeal against the US Securities and Exchange Commission (SEC) over the regulator?s decision to classify its native token as a security. This marks the latest development in the ongoing legal battle between LBRY and the SEC.
The SEC had previously issued a cease and desist order against LBRY in March, alleging that the company had sold unregistered securities through its initial coin offering (ICO) in 2016. The SEC had also claimed that LBRY had not registered its token with the regulator, which it said was necessary under US securities laws.
LBRY?s Arguments
LBRY has argued that its token, which is used to access content on its platform, is not a security but rather a utility token. The company has also claimed that the SEC?s classification of its token as a security is a violation of its First Amendment rights, as it would restrict LBRY?s ability to offer and distribute content.
In a statement, LBRY CEO Jeremy Kauffman said that the company would ?vigorously defend our rights and the rights of our community?.
SEC?s Response
The SEC has yet to respond to LBRY?s notice of appeal. However, the regulator has previously defended its decision to classify LBRY?s token as a security, saying that it was necessary to protect investors.
In a statement following the cease and desist order in March, the SEC said that LBRY had ?failed to provide investors with the information they need to assess the risks and benefits of owning LBRY Credits?. The regulator also warned that LBRY could face fines and other penalties if it continued to violate securities laws.
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Conclusion
LBRY?s decision to file an appeal against the SEC?s decision is the latest chapter in the ongoing legal battle between the blockchain firm and the regulator. The outcome of the appeal could have significant implications for the broader cryptocurrency industry, as it could provide clarity on how the SEC views tokens issued through ICOs.
