The United States securities regulator is seeking to revise its $22 million punishment against decentralized content platform LBRY, acknowledging it is unlikely to be able to cough up the funds to be able to pay it. 

In a May 12 filing in a New Hampshire District Court, the Securities and Exchange Commission sought an amendment to its request for remedies in its successful case against LBRY.

Instead of seeking the original $22 million civil penalty — the amount it claims LBRY gained from the sale of its token LBRY Credits (LBC), the SEC has asked the court to impose a fine of $111,614, citing LBRY’s “lack of funds and near-defunct status.”

The regulator also scrapped its separate $22 million request for disgorgement, funds it claimed LBRY needed to pay back as they were illegally gained from the LBC sales.

The request also asks to stop LBRY from “conducting future unregistered offerings of crypto asset securities.”

“The Commission acknowledges LBRY’s representations that it is defunct, ceasing operations, and without the funds to pay a larger fine, and recognizes that a defendant’s ability to pay is a factor when imposing a civil penalty,” the SEC said in the filing.

The SEC first filed a civil suit against LBRY in March 2021, alleging that the firm’s LBC sales were unregistered securities offerings. It asked for a total punishment of $44 million, evenly split between a civil penalty and disgorgement along with the court to order LBRY to halt any further LBC sales.

The SEC won the case in November 2022, while the preceding Judge also ruling that LBC was a security.

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The SEC said the smaller penalty was a compromise between “the need to balance the deterrence from a penalty with LBRY’s inability to pay.”

In a December filing, LBRY claimed the SEC’s request for $22 million wasn’t reasonable, as it was “vastly” overstated and failed to “deduct any of LBRY’s legitimate business expenses.”

LBRY said the SEC’s calculation of the sum was “based on rough, back-of-the-envelope math” and the amount it sought was “simply not supported by the record.”

In December 2022, around a month after the SEC won the case, LBRY said it “will likely be dead in the near future” due to being “killed by legal and SEC debts.”

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Update (May 16, 12:05 am UTC): This article has been updated to correctly reference the disgorgement and civil penalty amounts sought by the SEC.