The SEC wanted LBRY to pay millions of dollars in fines, but the bankrupt company has already admitted it cannot afford to do so.
The United States Securities and Exchange Commission is attempting to reduce the $22 million fine it levied on the decentralized content platform LBRY after realizing the company is very unlikely to have the cash on hand to make the payment.
The Securities and Exchange Commission (SEC) filed an amended request for remedies against LBRY on May 12 in a New Hampshire District Court.
The SEC has urged the court to impose a punishment of $111,614 on LBRY rather than the initial $22 million, which is the amount it alleges LBRY received via the sale of its token LBRY Credits (LBC). This is because of LBRY’s “lack of funds and near-defunct condition.”
As part of the request, it is said that LBRY must be prevented from “conducting future unlawful offerings of crypto asset securities.”
In March 2021, the SEC initiated a civil litigation against LBRY, claiming the company’s sales of LBC constituted unregistered securities offerings. It sought disgorgement of $22 million and an injunction barring LBRY from making any further LBC transactions.
In November 2022, the SEC prevailed in court after the previous judge decided that LBC was security. According to a document filed by LBRY in December, the company believes the SEC’s request for $22 million is excessive since it “vastly” exaggerated revenue and did not “deduct any of LBRY’s legitimate business expenses.”
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