WASHINGTON D.C. – According to newly-released court documents, the U.S. Securities and Exchange Commission (SEC) will lower the penalty imposed on the crypto startup firm LBRY from $22 million to $111,614. The revision comes in light of LBRY’s deteriorating financial condition and near-defunct status, as stated by the SEC.

The SEC filed a lawsuit against LBRY in March 2022, alleging that the company’s sale of its native LBC tokens violated federal securities laws. In November, a court ruled in favor of the SEC, finding that LBRY breached securities laws by failing to register with the regulatory body.

LBRY has consistently maintained that its LBC token should not be classified as securities since it was sold as a key to access its blockchain services, not as an investment contract. 

The company – which had a fully diluted market cap of $12 million – argued in court that the $22 million fine was uncalled for, citing the SEC’s $5 million fine against Kik after it sold its own token for $100 million.