The U.S. Securities and Exchange Commission (SEC) is looking to reduce the fines it previously tried to impose on LBRY, according to people familiar with the matter. May 12 Court Submissions.
SEC Reduces Fines, Bans Participation in LBRY
With court clearance, the SEC plans to drop the previous disgorge claim and instead impose a civil penalty of $111,644.
The regulator intends to impose a reduced fine on the grounds that LBRY cannot afford to pay a higher fine as it is dysfunctional and will soon cease operations.
However, the SEC has issued an injunction against LBRY, banning it from making unregistered securities offerings at least until it dissolves its crypto holdings and dissolves. LBRY has yet to meet those conditions, according to the SEC.
The SEC added that LBRY’s misconduct was “recurrent” and “egregious” and may continue to violate the law. LBRY’s lack of funding and demise as a legal entity could give the project and its members a “sense of impunity,” the SEC said.
LBRY had previously requested a reduction in fines
The SEC originally filed a lawsuit against LBRY in March 2021 and won in November 2022. Regulators had originally planned to impose a fine of $22 million. LBRY sought a reduction in the fine in December 2022, leading to this reduction.
LBRY was intended to provide a blockchain-based file-sharing and video platform with social features and cryptocurrency payments. The LBRY app and website still exist.
Post-SEC files to reduce LBRY’s multi-million dollar fine to $111,000 were first posted on CryptoSlate.
