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LBRY Inc., a peer-to-peer content distribution network, has filed a Notice of Appeal against a U.S. District Court's judgment.
The court had ruled that LBRY's native token, LBRY Credits (LBC), was an unregistered security, thus siding with the U.S. Securities and Exchange Commission (SEC).
Federal Judge Paul Barbadoro rejected LBRY's argument that its LBC token had utility and was not solely an investment, stating that "objective economic realities" indicated it was a security. LBRY responded to the ruling with resilience, tweeting, "We're going to lick our wounds for a little bit but we're not giving up."
The appeal, dated Sept. 7, comes after the SEC recently sought to reduce a $22 million fine on LBRY to just $111,614, citing the company's financial constraints.
XRP supporters watching the case
The most recent development is being closely watched by supporters of Ripple, another blockchain company that has been embroiled in a similar legal battle with the SEC.
The SEC's victory over LBRY in July was seen as a significant setback for Ripple and its cryptocurrency, XRP.
Both companies were sued by the SEC for allegedly selling unregistered securities, with Ripple facing its lawsuit just months before LBRY.
Ripple facing SEC appeal
Interestingly, Ripple managed to score a partial win against the SEC, with secondary sales of its XRP token not being recognized as securities. This nuanced outcome may have influenced LBRY's decision to appeal.
However, it is worth noting that the SEC itself is currently working to appeal the Ripple case, meaning that the final outcome is far from certain.