- LBRY Inc has lost its lawsuit against the SEC and is shutting down services due to millions in debt. The company’s executives, employees, and board members have resigned.
- The SEC sued LBRY last year for violating securities laws by selling its LBC token. LBRY lost and was ordered to pay over $1 million in fines. Its recent appeal attempt has now been halted.
- LBRY’s assets like Odysee are being placed in receivership. The company warned the LBRY blockchain may die without enough continued usage and adoption from the community.
LBRY Inc, the developer of the LBRY blockchain, is shutting down services because it lost a lawsuit to the US Securities and Exchange Commission (SEC) and it has several million dollars in debts. LBRY announced that its executives, employees and board members have resigned while its assets like Odysee are being placed in receivership.
LBRY Loses Lawsuit Against SEC
Last year, the SEC sued LBRY for violating federal securities laws by selling its LBRY credits (LBC) token. The regulator initially obtained a summary judgment that would have compelled LBRY to pay a hefty $22 million fine which was subsequently reduced to a more modest $1,116,414. While the company attempted a comeback last month by filing a notice of appeal against the regulator, its current decision means that the move has been halted and its operations would finally shut down.
Millions in Debt and Assets Placed in Receivership
In its Oct 19 statement, LBRY explained that it owed several million dollars in debt to its legal team, private debtors and the SEC. Additionally, the company said its executives, employees and board members have resigned while its assets like Odysee are being placed in receivership.
What Happens to the LBRY Blockchain
LBRY Inc stated that the LBRY blockchain is a decentralized blockchain with open-sourced codes that might continue to operate if it is being used. However, the company warned that “The LBRY network might die too. Decentralization isn’t magic – it only works if enough people use it.”
LBRY blockchain is a decentralized file-sharing network that has over 17 million registered identities and more than 30 million pieces of published content. Odysee, a platform on the blockchain, is a leading decentralized social media site surpassing competitors like Mastodon and BlueSky with a monthly user base exceeding 6 million.
The shutdown of LBRY Inc serves as a cautionary tale that decentralization alone cannot sustain a blockchain network. For the LBRY blockchain to survive, it will need continued adoption and usage from its community. The ongoing legal battle with the SEC also highlights the regulatory risks facing blockchain projects, especially those that issue or sell tokens.