SEC Seeks to Drastically Reduce $22M Fine on LBRY Crypto Firm to $111K

The U.S. Securities and Exchange Commission (SEC) seeks to drastically reduce $22M fine on crypto startup LBRY to a mere $111K, court documents reveal on Friday.

The regulator has justified its decision to retract the earlier fine request by pointing to LBRY's "lack of funds and near-defunct status," as contributing factors.

In March of the previous year, LBRY was sued by the SEC over claims that the sale of its native LBRY credits (LBC) had breached federal securities laws. Later in November, a judge in New Hampshire ruled that the startup had indeed violated securities laws by not registering with the SEC.

LBRY's founder, Jeremy Kauffman, has expressed concerns about the potential impact of this case on the broader crypto industry. The company has consistently maintained that LBC is not classified as a security. Ripple Labs is facing similar charges from the SEC regarding the sale of $1.3 billion worth of XRP tokens and is also presenting a similar defense.

The SEC not only sought a penalty but also put forth the argument that LBRY should be subject to an "enjoinment," essentially restraining the company until it fulfills its intentions to dissolve the company and burn the LBC tokens. LBRY had previously contested the legitimacy of the SEC's $22 million penalty, drawing a comparison to the regulator's $5 million settlement with Kik in a case involving a $100 million unregistered token sale.

Source Coindesk