The U.S. Securities and Exchange Commission (SEC) aims to reduce a fine that it previously tried to impose on LBRY, according to a May 12 court filing.
SEC will reduce fine, enjoin LBRY
The SEC, with court permission, will withdraw its prior request for disgorgement and instead impose a civil penalty of $111,644.
The regulator intends to impose the reduced fine on the grounds that LBRY is defunct and will soon end operations, making it unable to afford the larger fine.
However, the SEC said that it would impose injunctions on LBRY, preventing it from conducting unregistered securities offerings at least until it destroys its LBC crypto holdings and dissolves. LBRY has not yet met those conditions, the SEC said.
The SEC added that LBRY’s illegal actions were “recurrent” and “egregious” and that it could continue to violate the law. LBRY’s lack of funds and its end as a legal entity could give the project and its members a “sense of impunity,” the SEC said.
LBRY previously requested reduced fine
The SEC initially filed its case against LBRY in March 2021 and won the case in November 2022. The regulator originally intended to impose a $22 million fine. LBRY asked for a lower fine in December 2022, leading to the latest reduction.
LBRY aimed to provide a blockchain-based file-sharing and video platform with social features and crypto payments. The LBRY app and website still exist.
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