Media Freedom with LBRY CEO Jeremy Kauffman

[CCTelander]

Killing censorship one step at a time. Great stuff.

[CCTelander]

I figured this would get a little more attention.

[Anti Globalist]

Great video.

[Pauls' Revere]

Bump for free speech.

[CCTelander]

Bump for free speech.

Free Speech FTW.

[Occam's Banana]

The End of LBRY Inc.
https://odysee.com/@lbry:3f/theendoflbryinc:d
{LBRY | 19 October 2023}

LBRY Inc. must die, there is no escaping this. It has lost a judgment to the federal government, has several million dollars in debts, and has pledged to shut down.

This will be our last post.

What’s happening to LBRY, Inc?

LBRY Inc. has debts to the SEC, its legal team, and a private debtor that it cannot pay. Its assets, including Odysee, are being placed into receivership. As of this post, all LBRY executives, employees, and board members have resigned. All will be doing what is required to satisfy any outstanding legal requirements, but no more.

What’s happening to the LBRY network?

Fortunately, LBRY isn’t our network. It’s a decentralized network, and all the code powering it is open source.

But the LBRY network might die, too. Decentralization isn’t magic – it only works if enough people use it. Could LBRY still swallow all digital publishing like we intended? Could this be the beginning of a descent to obscurity? Who knows? It’s not like we’re LBRY experts.

The truth is that even writing this post fills us with anxiety. Everything we say is being scrutinized by people with immense resources that aren’t big fans of us, free speech, or any technology that enables dissent. And if we violate another one of the United States’ incredibly clear and easy-to-follow laws, we might end up in jail.

However, we got into the game by being honest in the cryptocurrency space when few were. We then got in trouble for being so honest. It only makes sense to go out the same way. It’s our nature.

What’s happening to Odysee?

Odysee, the flagship LBRY app, continues to serve more than 6,000,000 people each month, even while it has been iced. CoinGecko rates Odysee as the most popular web3 social media site in the world.

Odysee’s popularity makes it the most valuable asset of LBRY, Inc. While it’s nearly certain the Odysee assets will be assumed by someone interested in resuming its growth, it’s unclear if Odysee will continue to use the LBRY network in the future, switch to another cryptonetwork, or switch to being a traditional web2 platform.

For the data nerds and founders, a full log of our monthly and weekly Odysee user data is here. When much of the crypto industry was burning money, we succeeded at building useable web3 software that people actually wanted to use.

What happens to LBRY channels and content?

Over 1,700,000 identities and 30,000,000 pieces of content have been published to the LBRY blockchain. As long as the LBRY blockchain continues to be mined, those identities and records will continue to exist.

However, the content itself is not published to the blockchain, and requires host nodes to function. If Odysee chooses to stop utilizing LBRY, then content that is not actively seeded by others will stop being available. Using LBRY Desktop is the best way to ensure your content remains available.

Can Odysee switch from LBRY?

Maybe? Maybe not? It’s unclear whether Odysee has permission to port content that was published from LBRY to somewhere else. Additionally, at one point Odysee committed users that it would always use LBRY so long as it was legal to do so.

But we’re feeling pretty done with legal fights, and we’d rather see our friends at Odysee continue to do productive work supporting free speech. Ultimately, this will be decided by users, not by us, and we encourage users to wait and see.

Is the LBRY token still a security?

Hahahahaha, we’re not falling for believing this question is answerable again.

In our case, the judge was clear that only LBRY Inc. broke the law, and only because it kept a significant premine of the LBRY token. Plus, there was the Ripple decision, and if you add those together, then [sentence redacted by legal team].

Will LBRY Inc. be continuing its appeal against the SEC?

No.

Where is the LBRY community now?

The LBRY Foundation runs a Discord chat and some other communities.

What happens to lbry.com, GitHub, and other assets?

The lbry.com domain, LBRY social media handles, GitHub, and all other assets are to be used to satisfy debts. We recommend trusting Jack Robison on any issues or debates of LBRY code authenticity, as even this channel itself is technically an asset of LBRY Inc.

So Long

Our online freedom is increasingly threatened as it’s simultaneously become increasingly necessary. We’re proud to have played a role in the effort to keep the internet free, but also remorseful to have everything play out as it did.

Even harder than dealing with the federal government is the idea that we would have let people down who had faith in us. To creators, users, and investors (in that order), thank you for putting your confidence in us. We won’t apologize to the government, but we’re grateful and apologetic to you.

Bye.

[Occam's Banana]

The End of LBRY Inc.
https://odysee.com/@lbry:3f/theendoflbryinc:d
{LBRY | 19 October 2023}

[...]

https://twitter.com/HesterPeirce/sta...65338489352613


Overdue: Statement of Dissent on LBRY
https://www.sec.gov/news/statement/p...nt-lbry-102723
{Commissioner Hester M. Peirce | 27 October 2023}

The Commission has brought many troubling crypto enforcement actions, but the LBRY, Inc. (“LBRY”) case has especially unsettled me. A statement on the case is overdue. I did not support bringing the case, but have been unable to speak publicly about my concerns while the case has been in litigation. Last week, after losing in federal district court on the question of whether the sale of LBRY tokens was an unregistered securities offering, LBRY announced that it will not move forward with an appeal of the decision.[1] Instead, the company will shut down and its assets will be placed in receivership and used to satisfy its debts, including the civil money penalty owed to the Commission.[2] Are investors and the market really better off now after the Commission’s litigation contributed to the demise of a company that had built a functioning blockchain with a real-world application running on top of it? This case illustrates the arbitrariness and real-life consequences of the Commission’s misguided enforcement-driven approach to crypto.

One does not have to dig deep to find fraudulent crypto projects that sold tokens with promises that they did nothing to fulfill. This sad reality makes the Commission’s decision to bring a case against LBRY especially puzzling. LBRY’s approach was more conservative than the approach many other projects took.[3] Here, the blockchain was up and running at the time most tokens were sold, and the Commission’s complaint did not allege, and the court did not find, evidence of fraud. LBRY built a blockchain to facilitate data sharing, afford greater control to content creators, and make censorship more difficult. LBRY created a popular platform on the blockchain for sharing videos and other media.[4] The open-source LBRY blockchain was available for anyone else to use.[5] Why go after a company that sold a token for a functioning blockchain with an established use when we could have pursued plenty of other projects that were outright frauds and did not attempt to comply with the securities laws? To make matters worse, the Commission took an extremely hardline approach in this case. For example, after winning on summary judgment, the Commission sought monetary remedies of $44 million and asserted that LBRY’s offer to burn all tokens in its possession was not sufficient assurance that LBRY would not violate the registration provisions in the future.[6] The Commission’s requested remedies were entirely out of proportion to any harm. Indeed, the court stated during the remedies hearing that “the absence of fraud allegations, [and] the fact that there was some measure of uncertainty” regarding the application of the securities laws when LBRY commenced its offering were facts that “should be taken into account when considering a penalty.”[7] After the remedies hearing, the Commission pared its penalty request back to a significantly lower $111,614, which the court approved.[8]

The application of the securities laws to token projects is not clear, despite the Commission’s continuous protestations to the contrary. There is no path for a company like LBRY to come in and register its functional token offering.[9] Even if a company did manage to register its token offering, it would not be a particularly useful effort. Compliance with the securities laws is important because we want to ensure that people buying securities receive accurate and reliable information so they can assess the risks and rewards of an investment. Here, LBRY made significant disclosures outside of the registration process—disclosures that the Commission did not allege were fraudulent or misleading—and there is little to indicate that LBRY’s disclosures did not provide token purchasers with information adequate to assess whether the tokens were a good fit for them.[10] The time and resources we expended on this case could have been devoted to building a workable regulatory framework that companies like LBRY could have followed. Then the market could have decided LBRY’s fate.

Even if, as the judge ruled here, the offering of tokens should have been registered, our scorched earth approach in remedying the violation was completely out of proportion to any investor harm. How does the result in this case protect LBRY investors, who likely would have preferred that the company continue to exist to support the blockchain, which is still in its infancy? The judge did not rule on whether the token itself was a security or on the status of secondary sales of LBRY tokens,[11] which means that the LBRY blockchain may live on, but its path forward is difficult. The Commission’s action forced a group of entrepreneurs to abandon what they built. Our disproportionate reaction in this case will dissuade people from experimenting with blockchain technology, which LBRY aptly describes as “technology that enables dissent.”[12] A government of a free people should welcome dissent and the technologies that enable it.

Earlier this year, LBRY tweeted: “It’s the year 2028, hundreds of thousands of Americans have been jailed for using illegally cryptocurrency instead of CBDCs, and Hester Pierce [sic] is still just writing dissenting memos.”[13] Although I will be tending bees, not writing dissents, in 2028, I think often about the crux of that criticism and ask myself: “What could I do to help prevent another group of people with a big idea for changing the world from going through what LBRY has over the past several years?” I have not come up with an answer to that question; however, I urge people who have suggestions about how the Commission can right its course on crypto and innovation more broadly, to send them my way.[14]



[1] The End of LBRY, Oct. 19, 2023, https://odysee.com/@lbry:3f/theendoflbryinc:d. [see thiis post - OB]

[2] Id. (“LBRY must die, there is no escaping this. It has lost a judgment to the federal government, has several million dollars in debts, and has pledged to shut down.”).

[3] See, e.g., DAO Today with Alexa Mil Podcast (Dec. 27, 2022), at approximately minute 12 (comments of Jonathan Schmalfeld) (“Lots of people looked at LBRY as doing things the right way. They weren’t doing the ICO. When they released the fully developed platform. The tokens were consumptive. There was an actual use for them on release date. They did a traditional investment raise. They brought on shareholders. They used securities and venture investing. And they didn’t sell tokens as part of that. There wasn’t any kind of pre-token rounds as part of that. And then they waited a year until after the platform was actually working and functional and there was a good amount of videos on there.”).

[4] See Odysee, https://help.odysee.tv/category-basics/whatisodysee/ (last visited Oct. 24, 2023). LBRY subsequently transferred this platform to its Odysee subsidiary.

[5] See LBRY, https://lbry.com/faq/what-is-lbry (last visited Oct. 24, 2023) (describing the LBRY protocol). As the district court noted when it granted summary judgment to the Commission, it was “generally uncontested” that “(1) LBC is a utility token designed for use on the LBRY Blockchain, and (2) some unknown number of purchasers of LBC acquired it at least in part with the intention of using it rather than holding it as an investment.” SEC v. LBRY, Inc., 639 F.Supp.3d 211, 220 (D.N.H. 2022).

[6] Commission’s Opposition to LBRY’s Motion to Limit the Commission’s Remedies at 9-11, 13-15, SEC v. LBRY, Inc., No. 21-cv-260 (D.N.H. Dec. 19, 2022), ECF No.94 (requesting $22 million in disgorgement and a $22 million civil money penalty).

[7] Transcript of Motions Hearing Before the Honorable Paul J. Barbadoro at 50, SEC v. LBRY, Inc., No. 21-cv-260 (D.N.H. Jan. 30, 2023), ECF No. 105; see also id. at 17 (“Let’s be fair here. You are not alleging that LBRY engaged in any fraudulent activity, first. Second, although I held that LBRY had fair notice sufficient to allow for the enforcement of the Securities Act against it for those offerings, the fact of the matter is that this was one of the first non-fraud cases that did not involve an initial coin offering . . .”); and id. at 51 (“You have to go back to the time this action was filed. This was relatively early on in the development of the SEC’s position with respect to crypto offerings . . .”).

[8] Commission’s Supplemental Brief on Remedies at 3-4, SEC v. LBRY, Inc., No. 21-cv-260 (D.N.H. May 12, 2023), ECF No. 107 (requesting a $111,614 civil money penalty and withdrawing the request for disgorgement); SEC v. LBRY, Inc., 2023 WL 4459290 *5 (D.N.H. July 11, 2023) (imposing $111,614 civil money penalty).

[9] See, e.g., Rodrigo Seira, Justin Slaughter, and Katie Biber, The Current SEC Disclosure Framework Is Unfit for Crypto (Apr. 20, 2023), https://policy.paradigm.xyz/writing/...ation-part-iii (“As we have shown above, the current securities framework was tailor-made to regulate fundraising by centralized legal entities issuing securities, such as a company selling shares to the public in its ‘IPO.’ However, crypto assets differ fundamentally from securities and therefore raise different investor disclosure considerations.”).

[10] See, e.g., Coinbase, Re: Petition for Rulemaking – Digital Asset Securities Regulation at 5-6 (Jul. 21, 2022), https://www.sec.gov/rules/petitions/2022/petn4-789.pdf (“The SEC disclosure regime has historically focused on ensuring that investors have material information necessary to make an informed investment decision. Current disclosure requirements, however, do not cover a number of features unique to digital assets that would undoubtedly be considered important when making an investment decision. For example, investors would likely find information about the risk of a network attack, what kind of governance rights are embedded in which tokens, who has the ability to change the code underlying the assets or the network, and other features that do not exist with respect to traditional securities to be material. Additionally, investors would benefit from comparable disclosures across each digital asset security to assist in identifying differences among investment opportunities.”).

[1]1 SEC v. LBRY, Inc., 2023 WL 4459290, *3 (D.N.H. July 11, 2023).

[12] The End of LBRY, Oct. 19, 2023, https://odysee.com/@lbry:3f/theendoflbryinc:d. [see thiis post - OB]

[13] LBRY Inc, LLC (@LBRYcom), X (Feb. 9, 2023, 4:39 PM), https://twitter.com/LBRYcom/status/1623798813881163778. Public blockchains eliminate the need for reliance on a central intermediary, which makes censoring information stored on a blockchain more difficult.

[14] Email suggestions to: CommissionerPeirce@sec.gov.

[Occam's Banana]

https://twitter.com/HesterPeirce/sta...65338489352613


Overdue: Statement of Dissent on LBRY
https://www.sec.gov/news/statement/p...nt-lbry-102723
{Commissioner Hester M. Peirce | 27 October 2023}

[...]

https://twitter.com/jeremykauffman/s...84290179342475


https://twitter.com/jeremykauffman/s...83074363768933

[Occam's Banana]

Overdue: Statement of Dissent on LBRY
https://www.sec.gov/news/statement/p...nt-lbry-102723
{Commissioner Hester M. Peirce | 27 October 2023}

[...]

[...] I think often about the crux of that criticism and ask myself: “What could I do to help prevent another group of people with a big idea for changing the world from going through what LBRY has over the past several years?” I have not come up with an answer to that question; however, I urge people who have suggestions about how the Commission can right its course on crypto and innovation more broadly, to send them my way.

https://twitter.com/NotGovernor/stat...14400089440309

[Occam's Banana]

https://twitter.com/HesterPeirce/sta...65338489352613


Overdue: Statement of Dissent on LBRY
https://www.sec.gov/news/statement/p...nt-lbry-102723
{Commissioner Hester M. Peirce | 27 October 2023}

[...]

RELATED: SEC Commissioner interviewed regarding crypto