New Hampshire Issuer of Crypto Asset Securities That Violated Registration Requirements Enjoined and Ordered to Pay Penalty

Judge Peter Barbadoro of the United States District Court for the District of New Hampshire has issued a ruling against LBRY, Inc., a software company based in New Hampshire that issued crypto asset securities known as “LBRY Credits” or “LBC.” The court order mandates LBRY to pay a civil penalty amounting to $111,614. Additionally, LBRY has been permanently barred from committing further violations of the registration provisions under federal securities laws and from participating in unregistered offerings of crypto asset securities in the future.

According to the SEC’s complaint, LBRY sold “LBRY Credits” to numerous investors, including those residing in the United States, through its video sharing application between July 2016 and February 2021. However, LBRY failed to file a registration statement, depriving potential investors of essential information required for a public offering. In November 2022, the Court ruled in favor of the SEC, granting summary judgment and concluding that LBRY had indeed violated Section 5 of the Securities Act of 1933, specifically the registration provisions of federal securities laws. LBRY’s argument claiming a lack of fair notice regarding the application of these laws to its offering and sale was rejected by the Court.

The SEC is being represented by Marc Jones, Peter Bryan Moores, and Amy Burkart from the Boston Regional Office.