• The US Securities and Exchange Commission (SEC) has asked for a $22 million fine on cryptocurrency startup LBRY to be revised to only $111,614.
• This is due to the company’s lack of funds and near-defunct status.
• The SEC’s request also seeks to enjoin LBRY until it dissolves the company and burns its native token, LBC.
SEC Seeks Reduced Fine on Crypto Firm
The U.S. Securities and Exchange Commission (SEC) has requested a reduction of a previously proposed $22 million penalty on crypto startup LBRY to just $111,614. The regulator cited the firm’s “lack of funds and near-defunct status” as reasons for seeking this revision.
LBRY Violated Securities Laws
In March last year, the SEC filed a lawsuit against LBRY for allegedly violating federal securities laws by selling its native token, LBC, without registering with the SEC. In November, a New Hampshire judge ruled that this constituted a violation of securities laws.
Impact on Crypto Industry
Jeremy Kauffman, founder of LBRY had previously argued that this case could have ramifications for the wider crypto industry since his firm maintained that LBC was not considered a security. Ripple Labs also faces similar charges from the SEC regarding their sale of around $1.3 billion in XRP tokens which they claim are non-securities as well.
SEC Request Seeks Dissolution & Token Burning
The SEC’s request to revise the penalty also sought an injunction requiring LBRY to dissolve its company and burn all remaining tokens before ceasing all operations entirely. This move was deemed necessary in order for any revised fine imposed by regulators to be valid and enforceable in court proceedings against LBRY in future cases or disputes concerning their token sales activities or other related matters..
Comparison with Kik Case
LBRY had recently compared the regulator’s initial proposed $22 million penalty with another case involving Kik where they were fined only $5 million over an unregistered token sale amounting to more than $100 million – thus highlighting how disproportionate such fines can become when dealing with startups who may not have sufficient resources or financial capabilities to pay them off in full..