According to a document filed by the agency in the District Court of New Hampshire, the SEC requested an amendment to the enforcement action against LBRY, significantly reducing the fine for the company.
The original $22 million was based on the SEC’s claim that LBRY received that amount through the sale of its token LBRY Credits (LBC).
However, given that the platform has ceased operations, it is unlikely to be able to pay the original fine, the SEC explained.
The regulator also requested that the court prohibit LBRY management from conducting any offerings of securities without registration.
This restriction will avoid potential violations of securities laws and prevent potential harm to investors;
“The Commission recognizes LBRY’s statements that the company is no longer operating, that it has ceased operations and does not have the funds to pay a large fine.
The SEC recognizes that a defendant’s ability to pay is considered an important factor in imposing an administrative fine,” the SEC said in a statement.
Recall that the SEC first sued LBRY in March 2021, accusing the company of selling unregistered securities.
In November 2022, the regulator won the case – the judge recognized the LBC token as a security.
However, LBRY management said that the $22 million fine requested was grossly overstated and did not take into account LBRY’s business expenses.