Ripple Ally Asks Court to Impose “Modest” Civil Penalty

In its new court filing, cryptocurrency startup LBRY claims that the U.S. Securities and Exchange Commission’s request for remedies showed a “complete disregard” of facts regarding members from the company being able to cause future securities violations. 

LBRY has asked the court to reject SEC’s demand for an injunction and disgorgement with a more modest civil penalty instead.

In their filings, the defendants allege that the SEC is conflating LBRY and Odysee, two distinct entities engaged in separate operations.

Moreover, they argued that the $22 million disgorgement demanded by the SEC was not based on factual numbers regarding profits caused by violations committed by LBRY.

The Commission claims that LBRY’s offering LBRY’s “illegal unregistered offering was a continuous effort conducted over more than five years.” However, due to the ambiguity of the law governing the registration of crypto assets, as well as the lack of the agency’s clear guidance on this matter, LBRY asserts that it did not engage in deliberate or reckless conduct. Therefore, a decision to impose an injunction is “unwarranted.”

LBRY has asked for only a modest first-tier civil penalty rather than injunctive relief and disgorgement.

Earlier this month, LBRY filed a motion to limit the SEC’s remedies. 

As reported by U.Today, the Ripple ally lost its case against the SEC in early November.