LBRY Inc., the company behind the LBRY blockchain, disclosed that it may cease to exist in the near future.
In a Twitter update on Wednesday, the company said it will “likely be dead” given the legal fees and debts owed to the U.S. Securities and Exchange Commission (SEC).
Since any information given privately to the SEC ends up leaking, we'd like to be upfront about the fact that LBRY Inc. will likely be dead in the near future.
We expect the LBRY mission to continue on, but the company itself has been killed by legal and SEC debts.
— LBRY 🚀 (@LBRYcom) November 29, 2022
On Nov. 8, Unchained reported that the SEC won a lawsuit alleging that the company had conducted an unregistered securities offering of its native token LBRY.
The lawsuit, which commenced in March 2021, concluded with a ruling from U.S. District Judge Paul J. Barbado who found that “no reasonable trier of fact” could reject the SEC’s claims against LBRY.
The LBRY protocol is a decentralized content hosting platform and its native LBRY token forms an important component of its underlying infrastructure. The LBRY token is used to credit publishers when content customers generate revenue.
The results of the SEC verdict attracted a degree of disapproval from several members of the crypto community. Delphi Labs’ General Counsel Gabriel Shapiro opined that the SEC’s calls for crypto companies to register is not an offer made in good faith.
“[D]espite calls to ‘come in and register’ most of the SEC’s remedies against token projects have been ‘destroy & delist all tokens’ or ‘pay so much money to SEC there is no value left in ecosystem’,” tweeted Shapiro on Wednesday
While it may be the end for the entity behind the blockchain, the company said that the protocol will continue to exist.
However, the lack of a token-issuing authority going forward led to some confusion among market participants.
What would happen to your tokens in reserve? Does all that get burnt? ♡
— XRPrincess (@XRPrincesses) November 29, 2022