eevBLAB 116 - The SEC Killed LBRY Inc. What happens to Odysee?

[EEVblog]

The SEC won its bogus political lawsuit against LBRY Inc. what does this mean for Odysee?
But they couldn't kill Open Source.

[6gv5]

Although I'm not a LBRY/Odysee user, and for sure I'm not a crypto fan myself, I hope the platform survives, but ... Elon? No, please. He's great at sending stuff and people into space and good at poking holes in Earth's crust and making cars, probably because he's forced to delegate to real experts there, but on a social media platform he'd be too tempted to apply his personal distorted views about freedom 1st person, and we already have seen the disaster happened to Twitter/X after he acquired it. Just no.

[abeyer]

bogus political lawsuit

[citation needed]

[SiliconWizard]

But they couldn't kill Open Source.

Oh, rest assured some people are actively trying to.

[switchabl]

I'm shocked, shocked to see libertarian cryptobros getting into trouble with the SEC.

Sorry about your video platform but they are really not the only ones who thought financial regulations didn't apply to "crypto":
https://www.sec.gov/spotlight/cybersecurity-enforcement-actions

[thm_w]

https://www.sec.gov/spotlight/cybersecurity-enforcement-actions

The first one is hilarious: "conducting an unregistered offering of crypto asset securities in the form of purported non-fungible tokens (NFTs) that raised approximately $8 million from investors to finance an animated web series called Stoner Cats."

It would be nice if they prioritized the outright scams and grifters though, over stuff like LBRY. eg pump and dump, rug pulls.

[nctnico]

https://www.sec.gov/spotlight/cybersecurity-enforcement-actions

The first one is hilarious: "conducting an unregistered offering of crypto asset securities in the form of purported non-fungible tokens (NFTs) that raised approximately $8 million from investors to finance an animated web series called Stoner Cats."

It would be nice if they prioritized the outright scams and grifters though, over stuff like LBRY. eg pump and dump, rug pulls.

Doesn't matter. Rules are rules and if companies are stupid and/or ignorant enough to not adhere to the regulations then they are taken down and rightfully so. It looks llike LBRY has been in contact with the SEC since 2016 so they have gotten more than enough time and leniency to get their sh!t together.

[Dave]

... the disaster happened to Twitter/X after he acquired it.

From what I see, it has gotten much better since Musk took over. Community notes were a brilliant addition.
The only ones I see bitching and moaning about Twitter today are the ones that lost control over the narrative being pushed, because regular people are able to add fact checks right below their tweets. It's hard to produce effective propaganda, if the lies being posted are contradicted with credible sources right below them.

[switchabl]

The first one is hilarious: "conducting an unregistered offering of crypto asset securities in the form of purported non-fungible tokens (NFTs) that raised approximately $8 million from investors to finance an animated web series called Stoner Cats."

It would be nice if they prioritized the outright scams and grifters though, over stuff like LBRY. eg pump and dump, rug pulls.

Maybe but AFAIK registration is supposed to make fraud harder in the first place because you actually have to provide (audited) financial information (https://www.investor.gov/introduction-investing/investing-basics/glossary/registration-under-securities-act-1933). Enforcing that seems like a good idea.

Unlike with LBRY, I don't think most of those cases go to court either. The "Stoner Cats" company seems to have accepted a 1m$ fine.
"More than 100 Commission orders, settled actions, and court decisions also have made clear when the offer and sale of a token is a security, including our actions against Telegram,[5] LBRY,[6] and Kik.[7]" (https://www.sec.gov/news/speech/gensler-remarks-piper-sandler-060823)
So to me it looks more like part of a broader crackdown, rather than a politically motivated action against alternative video platforms (and medical marijuana?).

[wilfred]

This is one link to where you might seek further details about the case.
https://www.natlawreview.com/article/shhhh-sec-wins-summary-judgment-over-library

I'd dispute that it is politically motivated. It is definitely one aspect where if you're making such claims then you ought to back it up with a decent argument. LBRY always sounded to me to be tainted by crypto deceit for originators to exploit downstream investors. I don't think they were ever very open and straightforward about this. And if they have debts then people lost money. People who should have been kept informed about financial aspects of the  company.

[EEVblog]

... the disaster happened to Twitter/X after he acquired it.

From what I see, it has gotten much better since Musk took over. Community notes were a brilliant addition.
The only ones I see bitching and moaning about Twitter today are the ones that lost control over the narrative being pushed, because regular people are able to add fact checks right below their tweets. It's hard to produce effective propaganda, if the lies being posted are contradicted with credible sources right below them.

Yep, this.
Everything about Twitter is better after Elon took over.
Only those with Elon Derangement Syndrone seem to have a problem with it.

[EEVblog]

Although I'm not a LBRY/Odysee user, and for sure I'm not a crypto fan myself, I hope the platform survives, but ... Elon? No, please. He's great at sending stuff and people into space and good at poking holes in Earth's crust and making cars, probably because he's forced to delegate to real experts there, but on a social media platform he'd be too tempted to apply his personal distorted views about freedom 1st person, and we already have seen the disaster happened to Twitter/X after he acquired it. Just no.

Put forward another name then that has a) the same financial capability, and b) the name recognition of Elon.
I also mentioned Futo.
Anyone who thinks Elon buying Odysee is worse than having it simply fold or bought by Google and then burried is not thinking correctly.

[EEVblog]

bogus political lawsuit

[citation needed]

Literally hundreds of other coins bigger than LBC (which was quite small and obscure in the crypto world) doing way worse "securities" stuff according to the SEC, and in a way less public fashion than LBRY, yet they go after the only coin that has practical utility and is competeing with the big players in the platform business.
If you believe that's just coincidence then I have a bridge to sell you, it's going real cheap.

And for those that have been following the hoops the SEC have made LBRY go through over the years, know the score.

[Nominal Animal]

Elon Derangement Syndrone

Now that is a three-word description that works on many different levels! 

As to those answering "[citation needed]" in a discussion: you could just write "I am unable to form any independent opinion or understanding by myself, and require an external Authority to validate any statements before I shall consider it."

As to the topic at hand, the U.S. Securities and Exchange Commission is known for its tendency to protect large banks and bankers like Bernie Madoff against their victims and the society in general, probably because of their tendency to hire the exact same people (so called "revolving door" between the two).  The only rules SEC seems to consistently apply are those that ensure the long-term careers of their top employees.  (For context and references, start with the regulatory failures listed in the relevant Wikipedia article and its links.)

[SiliconWizard]

Anyone who thinks Elon buying Odysee is worse than having it simply fold or bought by Google and then burried is not thinking correctly.

Or maybe they are thinking correctly according to the Ministry of Truth.

[abeyer]

Literally hundreds of other coins bigger than LBC (which was quite small and obscure in the crypto world) doing way worse "securities" stuff according to the SEC, and in a way less public fashion than LBRY, yet they go after the only coin that has practical utility and is competeing with the big players in the platform business.
If you believe that's just coincidence then I have a bridge to sell you, it's going real cheap.

And for those that have been following the hoops the SEC have made LBRY go through over the years, know the score.

Sure, there are others... but this feels like the guy at the side of the road arguing with the cop "But officer, the guy next to me was speeding more!"

Was there possibly politics involved in the choice of who to go after? Maybe? I haven't seen any definitive evidence either way. (Though if we're going to wander into pure conjecture, I would expect that the SEC was far more interested in clear and winnable cases to establish precedent, than in targeting companies based on who they compete with.)

Either way, given that what LBRY was doing seemed to fall clearly and directly afoul of the Howey test, it seems like their days were numbered no matter what.

[abeyer]

As to those answering "[citation needed]" in a discussion: you could just write "I am unable to form any independent opinion or understanding by myself, and require an external Authority to validate any statements before I shall consider it."

or perhaps just "I forgot my tin foil hat at home today, please clarify the wild jumps in logic without any obvious justification, as my brain is surely being scrambled by the men in black suits keeping me from seeing the truth"

[EEVblog]

Was there possibly politics involved in the choice of who to go after? Maybe?

You can stop your search there 
There are literaly only a single handful of coins that stand a chance of not being classed as a secuity under according the SEC. Bitcoin is so far the only one that they have definitely ruled on as being a commodity.
If you are really interested in the details then go investigate all the crap that the SEC put LBRY though over the last 5-6 years. Do this, no don't do this, do that, no don't do that, provide this, ok here it is, no we mean this, no we mean that...
People expect me to link to a single proof, LOL
The SEC were determinded to screw over LBRY and they did it, whatever it took. In the end you can't blame LBRY for giving up, they got crushed.

[EEVblog]

Sure, there are others... but this feels like the guy at the side of the road arguing with the cop "But officer, the guy next to me was speeding more!"

Ask any police officer and they'll tell you that if they want to target someone all they have to do is follow you for 5 minutes and they'll eventually find something to pull you over for.
The SEC didn't just randomly see LBRY speeding.

[nctnico]

Was there possibly politics involved in the choice of who to go after? Maybe?

You can stop your search there 
There are literaly only a single handful of coins that stand a chance of not being classed as a secuity under according the SEC. Bitcoin is so far the only one that they have definitely ruled on as being a commodity.
If you are really interested in the details then go investigate all the crap that the SEC put LBRY though over the last 5-6 years. Do this, no don't do this, do that, no don't do that, provide this, ok here it is, no we mean this, no we mean that...
People expect me to link to a single proof, LOL
The SEC were determinded to screw over LBRY and they did it, whatever it took. In the end you can't blame LBRY for giving up, they got crushed.

I've witnessed similar cases closeby. In all of them the core of the problem is companies/people unwilling to adhere to rules / unable communicate properly. Or to put it blunty: for as long as your head is stuck up your arse, you'll be screwed over because you are painting a target on your back. So if you are dealing with branches of the government that perform oversight tasks (like the SEC), you really need to get a 'compliance officer' who knows the proper ways to be compliant with the laws and regulations from day 1. And sometimes the wheels turn slower than you like.

[EEVblog]

I've witnessed similar cases closeby. In all of them the core of the problem is companies/people unwilling to adhere to rules / unable communicate properly.

There were few rules specifically for crypto and the multitude of ways it could be implemented. It's still the #1 problem in the industry, or at least in the US.
LBRY's downfall was ultimately that it was a US company.

[bsfeechannel]

Everything about Twitter is better after Elon took over.
Only those with Elon Derangement Syndrone seem to have a problem with it.

I'm not so sure. I for one don't have a problem with Elon Musk, but since he took over Twitter I can't informally follow your tweets. And since I don't post there, I don't have an interest to subscribe.

So, at least for me, Twitter has become a useless platform, just like any other that demands a subscription to access its content.

[EEVblog]

I'm not so sure. I for one don't have a problem with Elon Musk, but since he took over Twitter I can't informally follow your tweets. And since I don't post there, I don't have an interest to subscribe.
So, at least for me, Twitter has become a useless platform, just like any other that demands a subscription to access its content.

Yes, I forgot about that, I'll grant you that, that is the dumbest thing ever. I do believe it was supposed to be temporary though because the servers were getting heavily scrapped.

[abeyer]

There were few rules specifically for crypto and the multitude of ways it could be implemented. It's still the #1 problem in the industry, or at least in the US.

Yes there are absolutely some vague and unlitigated areas of the law, and they should be clarified. However, there are foreseeable consequences to interpreting an existing law that says "You can't do X with money" as meaning "Just do X with crypto, instead, it'll be fine!"

There are literaly only a single handful of coins that stand a chance of not being classed as a secuity under according the SEC. Bitcoin is so far the only one that they have definitely ruled on as being a commodity.

Yeah, and I'm not sure I completely agree with the regulations as they exist, but they do, and disliking them isn't grounds for dismissing enforcement as bogus and political.

If you are really interested in the details then go investigate all the crap that the SEC put LBRY though over the last 5-6 years. Do this, no don't do this, do that, no don't do that, provide this, ok here it is, no we mean this, no we mean that...
People expect me to link to a single proof, LOL
The SEC were determinded to screw over LBRY and they did it, whatever it took.

Or alternatively, you might interpret this as the SEC was pretty clear that what LBRY were doing wasn't intended to be allowed all along, but was getting the legal and regulatory mechanisms in place before going after them in earnest... and meanwhile LBRY kept trying to prod them for loopholes that would let them keep doing what they were doing. Ultimately they didn't find one.

[Nominal Animal]

As to those answering "[citation needed]" in a discussion: you could just write "I am unable to form any independent opinion or understanding by myself, and require an external Authority to validate any statements before I shall consider it."

or perhaps just "I forgot my tin foil hat at home today, please clarify the wild jumps in logic without any obvious justification, as my brain is surely being scrambled by the men in black suits keeping me from seeing the truth"

Eh?  Exactly how would a citation or external reference 'clarify the wild jumps in logic without any obvious justification'?

In this particular case, how do the words 'bogus [and] political' constitute a 'wild jump in logic'?  Especially when U.S. Securities and Exchange Commission is involved, which is known for such?

Also, you might wish to stop wearing tin foil hats.  They make you look like an unhinged person who thinks everything is a conspiracy theory.

[TimFox]

Summary of the court results:
https://www.sec.gov/litigation/litreleases/lr-25775
More recent results of the actions (Oct 23, 2023):
https://news.bloomberglaw.com/litigation/lbry-winding-down-drops-appeal-of-crypto-ruling-favoring-sec
From that bloomberg report, a quotation from lbry:
"Odysee and other assets will undergo a legal process to satisfy debts, but Odysee has a bright future ahead."

[EEVblog]

The SEC commisioner says the agency has not been very good when it comes to Bitcoin and crypto. 

https://twitter.com/WatcherGuru/status/1716507113072066666

[abeyer]

Yeah, it's not the greatest interview, but Peirce's ideas are worth listening to... the whole thing is here:

[wilfred]

Yeah, it's not the greatest interview, but Peirce's ideas are worth listening to... the whole thing is here:

It wasn't a bad interview. I thought the last few seconds from about 7:50 was particularly pertinent.

With respect to LBRY, and I'm not a scholar on it, I was always suspicious of so many tokens (or whaterever they're called) being held in reserve by the originators. There always seemed to me to be two different purposes for them and I suspected the originators were seeking to speculate on getting wealthy on their stash at some point.

[EEVblog]

With respect to LBRY, and I'm not a scholar on it, I was always suspicious of so many tokens (or whaterever they're called) being held in reserve by the originators. There always seemed to me to be two different purposes for them and I suspected the originators were seeking to speculate on getting wealthy on their stash at some point.

LBRY was always fully open and transparent on all their finances and how LBC tokens were allocated. It was part of the open source philosophy.

[nctnico]

There is a difference between making a promise and being bound to a contract. If the idea was to not make a profit from the pre-mined tokens and / or use these for a specific purpose, why wheren't these tokens parked in a non-profit organisation?

Say the value of the tokens would be several million US dollars. If these tokens are owned by an ltd, then what stops the share holders of that ltd to cash out the tokens and pay a nice dividend to themselves?