The United States securities regulator is seeking to revise its $22 million punishment against decentralized content platform LBRY, acknowledging it is unlikely to be able to cough up the funds to be able to pay it.\u00a0<\/p>\n
In a May 12 filing in a New Hampshire District Court, the Securities and Exchange Commission (SEC) sought an amendment to its request for remedies in its successful case against LBRY.<\/p>\n
Instead of seeking the original $22 million \u2014 the amount it claims LBRY gained from the sale of its token LBRY Credits (LBC), the SEC has asked the court to impose a fine of $111,614, citing LBRY\u2019s \u201clack of funds and near-defunct status.\u201d<\/p>\n
The request also asks to stop LBRY from \u201cconducting future unregistered offerings of crypto asset securities.\u201d<\/p>\n
\u201cThe Commission acknowledges LBRY\u2019s representations that it is defunct, ceasing operations, and without the funds to pay a larger fine, and recognizes that a defendant\u2019s ability to pay is a factor when imposing a civil penalty,\u201d the SEC said in the filing.<\/p>\n
The SEC first filed a civil suit against LBRY in March 2021 alleging the firm\u2019s LBC sales were unregistered securities offerings. It asked for $22 million in disgorgement and for the court to order LBRY to halt any further LBC sales.<\/p>\n
The SEC won the case in November 2022, the preceding Judge also ruled LBC was a security.<\/p>\n
Related: <\/em><\/strong>Jump Trading faces lawsuit over alleged $1.3B profit from TerraUSD<\/em><\/strong><\/p>\n The SEC said the smaller penalty was a compromise between \u201cthe need to balance the deterrence from a penalty with LBRY\u2019s inability to pay.\u201d<\/p>\n In a December filing, LBRY claimed the SEC\u2019s request for $22 million wasn\u2019t reasonable as it was \u201cvastly\u201d overstated and failed to \u201cdeduct any of LBRY\u2019s legitimate business expenses.\u201d<\/p>\n LBRY said the SEC\u2019s calculation of the sum was \u201cbased on rough, back-of-the-envelope math\u201d and the amount it sought was \u201csimply not supported by the record.\u201d<\/p>\n In December 2022, around a month after the SEC won the case a month prior, LBRY said it \u201cwill likely be dead in the near future\u201d due to being \u201ckilled by legal and SEC debts.\u201d<\/p>\n