Authorities in the United States appear ready to stamp out the menace of the illegal sales of securities in the guise of cryptocurrencies. The Securities and exchange commission (SEC) has dragged another crypto-company to the courts for the sale of “millions of dollars worth of unregistered securities to investors” since 2016.
The accused company LBRY, is a P2P content distribution protocol, with its native token being LBRY Credits (LBC). The SEC alleges that LBC is a form of securities that were sold to investors as investment contracts in exchange for money and other forms of contributions.
The court filing also indicated that the commission raised an allegation against LBRY that it issued a vendor 40 million units of the LBC token from its institutional fund so that the vendor can act as a market maker(MM) and sell the token at a “regular and continuous” interval based on the prevailing market price. This, the SEC believes, is a ploy by the company to make profit.
LBRY Denies any Wrongdoing
LBRY, on the other hand, has called the SEC complaints an “an outdated view of the economy that stifles innovation, accessibility and creativity.” The crypto company CEO, Jeremy Kauffman, also mentioned that the Commission did not recognize the attempt by his company to be compliant with its regulations and that the commission would only succeed in muddling the crypto industry as “most blockchain tokens would be deemed securities.”
HELP US SAVE CRYPTO
The future of crypto in US is at risk.
— LBRY (@LBRYcom) March 29, 2021
Notably, the SEC has stepped up its efforts in clamping down companies it believes are violating its securities law. An example of such efforts is its popular lawsuit against Ripple that has drawn attention far and wide.