The role of several regulatory bodies of many nations continues to be very important, as they are tasked to keep things in order. While housing regulatory bodies are tasked to ensure compliance and basic guidelines for homeowners and builders, financial regulatory bodies like the U.S Securities And Exchange Commission (SEC) are expected to help related financial firms curb financial crime, money laundering, etc. However, it seems that a few organizations have now belittled that role, prompting them to break the rule and several regulatory orders. According to the U.S SEC, popular Blockchain firm- LBRY are the latest culprits who have broken the regulatory order by selling unregistered securities.
LBRY realized $11 million from sales of unregistered securities
In the financial watchdog report, they have now charged the decentralized platform to court over the sale of unregistered securities in the country. According to the SEC report, the crypto firm with more than 10 million users has sold their tokens as investment, even before the network launch. The crypto firm has received a gross of $11million worth of investment from customers into its portfolio, despite it not being registered under the financial regulatory body.
LBRY was able to perpetuate these acts due to the decentralized nature of its services, which encourages customers to pay creators in token to see their work. However, in the SEC’s official report, they have now confirmed that the crypto firm has broken the Securities Act of 1933.
The SEC believes that the firm used the $11 million generated from its platform before it launched to kickstart the blockchain project. The SEC also details that the investors, whose LBC funds were used to start the project, were promised mouthwatering rewards, a situation that is the same with securities offerings.
LBRY set to face the law
The U.S SEC believes that LBRY has carried out its business in a fraudulent way, and they will be made to face the law. Many crypto analysts, before this time, have called for the intervention of several regulatory bodies to be involved in the affairs of the Blockchain space. The belief behind the intervention is believed to help guide crypto firms like LBRY, understand the consequences and dynamics of business actions that they partake in.
The SEC believes that LBRY will be the biggest beneficiary of their customers’ investments, despite the crypto firm promising their customer rewards on investment. They also believe that the company is the biggest beneficiary of the investments, as most of the investment rewards will fall into their portfolio.
The SEC, in their report, has now confirmed that LBRY and each of its affiliated partners will now face the law, as they want the law to take its course in the case. However, at the time of writing, LBRY is yet to accept or deny the U.S SEC allegations, and the financial regulators are taking the case to court.