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The Securities and Exchange Commission (SEC) filed a lawsuit against LBRY on the grounds that the company violated Section 5 of the Securities Act of 1933 by marketing and selling unregistered securities.
LBRY asserted that their business did not have to comply with the requirements of the Securities Act since the purported security, the LBC token, was not in fact a security.
Rather, the company describes LBC as functioning as a kind of digital money and considers it to be an essential component of the network. The regulatory body ended up winning against LBRY in the lawsuit at the end of last year.
Deaton Explains Why LBRY Jan. 30 Hearing is Important
John Deaton, the creator of CryptoLaw and a well-known crypto enthusiast, believes that the LBRY hearing that will take place on January 30 is among the most significant events in the cryptocurrency industry.
Deaton brought up the fact that the SEC had admitted on the record that a significant number of LBC token holders, if not the majority of them, did not consider LBRY’s token to be an investment and that these token holders used the tokens for their own personal consumption purposes.
Nevertheless, despite pressure from LBRY CEO Jeremy Kauffman and the judge who issued the verdict, the SEC declined to offer clarification on LBC’s secondary trades, Deaton pointed out.
The Securities and Exchange Commission wants a permanent injunction that does not make any distinctions between LBRY, its officials, and users of the platform or transactions on secondary markets.
Deaton proceeded by stating that when the transcripts of the LBRY hearing are made available to the public, the request that LBRY CEO Jeremy Kauffman made to the court must be provided to each senator and congressman.