- LBRY has filed a Motion to Limit the Remedies the SEC can seek against the company.
- The payment company failed to register its offer and sale of digital tokens in violation of Section 5 of the Securities Act.
- LBRY in its defense further argued that the SEC did not give “fair notice” that LBC is subject to the Securities Laws.
Blockchain-based payment network, LBRY, has filed a Motion to Limit the Remedies the U.S. Securities and Exchange Commission (SEC) can seek against the company. The SEC argued that LBRY’s token, LBC, is an unregistered security. LBC, according to LBRY, is not a security but rather a crucial part of the blockchain.
Defense Lawyer, James K. Filan, shared that LBRY made a move after the court granted the SEC’s Motion for Summary Judgment.
According to the court proceedings, the commission filed its complaint on March 29, 2021, alleging that LBRY failed to register its offer and sale of digital tokens, LBC, in violation of Section 5 of the Securities Act.
According to the court filings:
LBRY and the Commission filed cross-motions for summary judgment on May 4, 2022, addressing the sole issue of liability:i.e., whether LBRYwas required to register the LBC that it offered and sold as a security under Section 5 of theSecurities Act.
Earlier in November, the SEC received a summary judgment in the SEC v. LBRY case from the New Hampshire District Court concluding that the native token of the blockchain protocol and network developed by LBRY is security.
In addition, LBRY claimed that the SEC was unable to initiate enforcement action since it did not provide “fair notice” that LBC was subject to the Securities Laws. In the registered case, LBRY argued whether there was “an expectation of profits to be drawn primarily from the efforts of the promoter or a third party” is at the heart of the third Howey element debate.