XRP Lawyer Deaton Slams SEC Overreach Amid LBRY Closure

In a final farewell message, LBRY Inc., the blockchain technology company, has announced its closure due to insurmountable debts, leaving the cryptocurrency community in shock. The company, known for its pioneering work, cited challenges with the Securities and Exchange Commission (SEC) and mounting financial liabilities as the reasons behind its decision. However, LBRY’s open-sourced blockchain network, Odysee, continues to thrive despite the setback.

LBRY Issues Final Message

Blockchain company LBRY Inc. has issued its final message to the crypto community, citing “several million dollars” of debts that have now made it impossible for the firm to continue.

Meanwhile, in a heartfelt message shared on Odysee, a video-sharing platform powered by LBRY, the company acknowledged its inability to continue operations due to mounting financial challenges. LBRY revealed that it had significant debts, including those owed to the SEC, its legal team, and a private debtor, that it could no longer pay.

Notably, the company had initially announced its plans to wind down operations following a legal dispute with the SEC. While the regulatory authority initially sought a substantial fine of $22 million, it later reduced this amount to $111,000, understanding the financial constraints of LBRY.

Meanwhile, in its latest statement, however, the firm revealed it will no longer continue its appeal against the SEC. LBRY’s decision to halt its appeal against the SEC signified the company’s acceptance of the regulatory outcome. However, the firm stated that its executives, employees, and board members had all resigned and were now solely focused on fulfilling their legal obligations.

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How The Crypto Community Is Reacting?

In the comments section of LBRY’s post on Odysee, community members expressed a willingness to keep supporting Odysee up and running. Despite LBRY’s predicament, members of the crypto community have shown resilience, expressing their willingness to continue supporting Odysee and its open-sourced blockchain network.

Meanwhile, XRP lawyer John Deaton criticized the SEC for targeting a small American company and subjecting it to financial distress, despite a lack of fraud or misrepresentation. In addition, Deaton emphasized the importance of integrating the LBRY case into law school curricula nationwide, not only for its relevance in applying the Howey Test to contemporary blockchain and cryptocurrency technologies but also as a case study illustrating regulatory overreach by the SEC.

Simultaneously, Ripple’s Chief Technology Officer, David Schwarz, expressed disappointment with LBRY’s situation through a GIF posted in response to the announcement.

The cryptocurrency community’s response to LBRY’s closure has been a mixture of disappointment and calls for greater regulatory clarity. Many see LBRY’s case as emblematic of the challenges facing blockchain and crypto companies in navigating the legal landscape.

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