LBRY, a blockchain-based file sharing and payment network, has been the subject of a yearslong case by the Securities and Exchange Commission (SEC). The government body claims that LBRY’s token, LBC, is a security.

Why should we care?
The SEC’s case against LBRY highlights the very uncertainty the Biden administration hopes to minimize through its recent executive order on crypto. The blockchain-based company is small—having raised funds in the low millions—but its industry-wide impact may be massive once a ruling comes out. The SEC accused LBRY of selling LBC to institutional investors, and using the money raised to cover operating expenses; the SEC claims that, given that the returns on investment strongly affected business performance, then the coins should have been registered as securities with the SEC. LBC is managed by a centralized team, unlike other cryptocurrencies like bitcoin, but LBRY CEO Jeremy Kauffman thinks the court ruling could impact the entire crypto space. "If LBC is a security, every other cryptocurrency is a security," he said, "We are not trying to compete with the existing financial system. LBC is used for its intended purpose, not for speculative reasons." The SEC also has a similar case pending against Ripple for a $1.2B fundraising round in 2020 through its popular XRP coin. We should pay attention to timing: The SEC asked for a 30-day delay in proceedings against LBRY, which, according to Coindesk, could suggest the Commission wants to rule against Ripple before it does against LBRY. The precedent set in one case would affect the outcome of the other—and, presumably, the many crypto-based cases to follow.