SEC Is 'Out to Damage or Destroy' Crypto Industry in America: LBRY CEO

LBRY CEO Jeremy Kauffman called out the Securities and Exchange Commission at Messari’s Mainnet conference in New York this week, as the decentralized file-sharing network continues to navigate legal action from the regulator.

The SEC charged LBRY with selling unregistered securities in March of last year. The Commission alleged that the company raised $11 million through the sale of LBRY Credits, tokens that are used to upload files and make payments on the blockchain-based platform, before the LBRY network was built. The company disputes this claim and says no tokens were sold before the network was fully functional.

The SEC nevertheless viewed LBRY Credits as investment contracts, based on the notion that buyers believed they would reap profit from purchasing the tokens.

Kauffman said the company has been “fighting the SEC for coming up on five years" and soon expects a federal judge to weigh in with a ruling on whether a full trial is necessary.

SEC Sues LBRY Over $11 Million in Token Sales

The Securities and Exchange Commission (SEC) has charged crypto firm LBRY with selling unregistered securities. LBRY, a decentralized publishing platform that claims 10 million users, facilitated its operations via LBRY Credits, which are blockchain-based tokens. People can pay creators in LBRY Credits to view uploaded content. According to the SEC, however, before developing the network, it sold the tokens as investment contracts, with the assumption that their value would go up. All told, alle...

The verdict will have far-reaching implications for other companies as well, according to him, setting some level of precedent for companies that have raised money for their projects through an initial coin offering or ICO.

“The facts in this case would basically apply to every company in this room,” he said. “The SEC has very much demonstrated that they are out to damage or destroy the cryptocurrency industry in the United States.”

In case Kauffman's comments onstage at the conference and to Decrypt weren't clear enough, he also wore a shirt that visually expressed his frustrations with the SEC.

Even as Kauffman has faced pressure from regulators, he’s also stepped into the political realm with the goal of being elected this year. If he’s elected, one of his main priorities will be bringing more attention to the cryptocurrency scene.

Kauffman is currently on the ballot in New Hampshire, representing the Libertarian Party in a bid to be one of New Hampshire’s next U.S. senators.

Other cryptocurrency advocates have also turned to New England to host campaigns, including Bruce Fenton and Brock Pierce, but have had little success securing a seat.

Fenton lost his campaign for the Senate earlier this month and Pierce never found his way onto the ballot in Vermont. However, Keith Ammon, a representative in the House from New Hampshire who was reelected in 2020, has a track record of supporting the industry.

“You send him a pro-crypto bill, it will be introduced the next session,” Kauffman said. “That’s the only way we can make blockchain legal–we have to get into office, we’ve got to pass new laws,” Kauffman said.

Kauffman believes that his file-sharing platform and libertarian ideology are somewhat aligned, in regards to how some feel about politics and social media. “People are tired," he declared, "of having these bureaucrats, these middlemen, making these decisions for them.”

Editor's note: This article was updated after publication to clarify the SEC's allegations against LBRY.