“End of cryptocurrency?” This is a tough question!
But it is not just a question. It has nothing to do with the volatile price of cryptocurrencies. It is not connected to any technological limitation of Blockchains and distributed ledger technologies. It is not at all a threat from the hacker communities of the dark web.
But the subtitle says, “The entire crypto industry is under threat.”
If the cryptocurrency industry is really facing a threat, where is the source of this threat? Is it a threat from inside or from outside?
In fact, a real-world incident created a situation to push the crypto domain into an uncertain future full of question marks.
It started with the issuance of legal notices by a government body to cryptocurrency startups
Cryptocurrencies are slowly facing challenges from the national governments. The SEC aka Securities and Exchange Commission of the US, a government body, issued legal notices against many cryptocurrency startups with Initial Coin Offerings (ICO) and associated cryptocurrencies.
Government regulatory bodies are after cryptocurrency startups
The SEC remained silent during the ICO boom during the rise of cryptocurrency startups. But, later, SEC flooded alt-coin founders with a tsunami of legal notices.
SEC filed a lawsuit against Ripple, the cryptocurrency startup that offered XRP, one of the first few cryptocurrencies that promised global payments with fast processing of transactions and minimal fees.
SEC’s complaint against Ripple’s XRP is under the Securities Act of 1933. It alleges Ripple for issuing millions of dollars of ICO without registration.
The LBRY protocol also faces an unprecedented legal challenge from the same regulatory body SEC
The LBRY Foundation, the Blockchain protocol behind the video platform Odysee-dot-Com, has faced a legal challenge from the same SEC, aka Securities and Exchange Commission.
LBRY runs its “open, free, and fair network for digital content” platform, Odysee-dot-Com, home to more than twenty million global users. Soon, Odysee may rival YouTube, Amazon, and other video content providers.
LBRY offered LBRY Credits (LBC) to software developers for network contributions. LBRY also sold LBC on crypto exchanges to encourage its use and fund operations.
In their legal suit, SEC has claimed LBC as unregistered securities despite their real-life network utility. The suit tries to seek a permanent injunction, civil penalties, and (undisclosed) remedies of functioning of LBRY.
Any American technology business that receives legal notices from the SEC is under continuous challenge to run their business.
- First of all, any legal battle can incur large expenses.
- Secondly, the development works get a setback.
It may risk bankruptcy in legal fights with the government for violations of nothing precisely specified by the SEC.
The government body SEC doesn’t have specific complaints but wants to stop LBRY’s business
The surprising fact is that the SEC couldn't point out any specific cases of breaking the law for running a digital content publishing business supported by a decentralized network and a dedicated cryptocurrency.
When the layer of LBRY asks the SEC to specify the flaws and seek their advice on what is required to satisfy the law, SEC didn’t give any clear answer.
SEC uses an age-old security law of 1933 to sue the crypto startups. The law doesn’t have any clear provision to regulate the domain of decentralized technology.
SEC asks many silly questions in court. SEC asks LBRY why they have a website. When they are answered that every business can have a website, SEC is not satisfied!
SEC further asks why LBRY Foundation is running a business on a technology that is still under development. SEC doesn’t accept that a technology business can continuously develop to improve the system.
Who would gain if LBRY’s content publishing platform Odysee would stop due to the legal battle with the SEC?
LBRY is gaining popularity among content creators around the world. More and more creators are leaving YouTube to move to Odysee permanently. If Odysee is stopped, mainstream video platforms of the big techs can play their business without any challenge.
LBRY’s multi-format content publishing platform Odysee is a challenge for all the mainstream video content publishing and blogging platforms of the big techs
Since Odysee is a multi-format content publishing platform, it can publish text blogs, images, audio, and videos. In the absence of Odysee, the mainstream blogging platforms can run their blogging business without any challenge.
What would be the major impact of LBRY’s legal battle with the SEC on the crypto world?
It is clear from the reports published about the legal proceedings between the SEC and LBRY that SEC doesn’t understand Blockchain and decentralized computing.
- The SEC is advancing towards an aggressive and disastrous new standard that would classify almost all blockchain and distributed ledger-based tokens as securities.
- Classifying all actively-developed distributed ledger-based decentralized tokens as securities will be a bureaucratic nightmare for US residents and cryptocurrency businesses operating in the US.
- Under this new standard proposed by the SEC, almost any decentralized token has to be classified as a security, including Ethereum, which was previously considered safe. SEC complains that the nature of these technologies is never “finished” always in the “developing stage.”
- This change in SEC’s new classification will make it much harder for startups to form new blockchain and distributed ledger companies, which may cause massive job loss and hinder the development of critical new technology. The new standard by the SEC will help the big tech and Wall St. prosper!
Therefore, the entire blockchain and crypto industry is at risk in the United States. The big tech corporations and Wall Street would have high power as before, and many people could lose their jobs.
The larger impact of this legal battle would spread in all other nations. The global security and financial regulatory bodies would jump to control/stop the entire crypto industry.
Bringing it altogether
The legal battle of LBRY with the SEC is not an ordinary legal suit. Its impact would be devastating on the entire cryptocurrency industry in the US and other parts of the globe. This legal battle may endanger all cryptocurrencies. The future of cryptocurrency is under serious threat by the legal suit of the SEC against LBRY.
The LBRY Foundation started a campaign “HELP LBRY SAVE CRYPTO” and put up a website “LBRY, THE SEC, & THE FUTURE OF CRYPTO” for the purpose. https://helplbrysavecrypto.com/
#cryptocurrency #blockchain #lbry #contentpublishing #technology
Cheers! Debesh Choudhury
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Text Copyright © 2021 Debesh Choudhury — All Rights Reserved
I am a solution architect for Digital Identity, Data Privacy, Password & Cybersecurity, Distributed Ledgers, IoT, a Researcher & Academician of Electronics, Computer Eng. & IT. I am Co-Founder of “The Unfluencers ” LinkedIn Group and Senior Member of IEEE & SPIE.