In a bold and unexpected move, Lbry, the blockchain-based file-sharing and payment network has filed a notice of appeal to the United States Court of Appeals for the First Circuit on September 7.
LBRY’s Grounds for Appeal
LBRY has filed a Notice of Appeal against the SEC. pic.twitter.com/Zp9S0TP0Qw
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— LBRY (@LBRYcom) September 7, 2023
LBRY’s notice of appeal signals the firm’s resolve to contest the verdict issued by U.S. District Judge Vernon S. Broderick. The judgment, delivered in July, upheld the Securities and Exchange Commission’s (SEC) assertion that LBRY had violated U.S. securities laws by conducting an unregistered offering of its native cryptocurrency, LBRY Credits (LBC).
This Ruling not only imposed a civil penalty on LBRY but also prohibited the company from participating in any unregistered offerings of crypto asset securities in the future.
LBRY’s decision to appeal this judgment underscores its unwavering commitment to defending its business model and the decentralized principles that underlie its platform. The company maintains that LBC tokens are utility tokens, used to facilitate transactions and access content on its network, rather than securities.
The Significance of LBRY’s Appeal
The ongoing legal tussle between LBRY and the SEC holds profound implications for the broader cryptocurrency and blockchain industry. The outcome of this appeal has the potential to shape how regulators classify and regulate blockchain-based tokens, setting a critical precedent for similar projects in the future.
This latest development also raises questions about LBRY’s future trajectory and its determination to fight the SEC’s charges. It also underscores the unpredictable nature of regulatory battles in the crypto and blockchain space.
Moreover, this move suggests a potential shift in LBRY’s approach, and it arrives in the wake of several prominent victories within the crypto industry against the federal regulator, including cases involving Ripple Labs and Grayscale Investments.
On August 29, U.S. Court of Appeals Circuit Judge Neomi Rao delivered a ruling that marked a victory for Grayscale Bitcoin Trust (GBTC). The ruling granted Grayscale’s petition for review and vacated the SEC’s order denying the GBTC listing application.
Judge Rao’s ruling has been noteworthy for its critique of the SEC’s decision-making process. She pointed out that the SEC did not provide any substantial explanation for why it rejected GBTC’s proposal.
