SEC v. LBRY, Inc.

investment contractconsumptive usetoken utility

Forum: U.S. District Court, District of New Hampshire
Citation: 639 F. Supp. 3d 211 (D.N.H. 2022)
Docket: No. 1:21-cv-00260
Decided: 2022-11-07
Judge: Judge Paul J. Barbadoro
Posture: Cross-motions for summary judgment
Agency: SEC
Status: Judgment for the SEC. LBRY wound down operations in 2023.

Summary

The court granted summary judgment for the SEC, holding that LBRY offered and sold its LBC token as an unregistered security. Critically, it held that a token having a real consumptive or utility use does NOT prevent it from being sold as an investment contract.

Holdings

Does a token's consumptive/utility use defeat investment-contract status?

No. A token can have both consumptive and speculative uses and still be sold as a security; what matters is the objective economic reality of how it was offered.

Quote as reported (operator-verify): “Nothing in the case law suggests that a token with both consumptive and speculative uses cannot be sold as an investment contract”

Source: Greenberg Traurig (quoting the opinion) · fetched 2026-06-04

Why it matters

LBRY closed the most common token defense: "it's a utility token, not a security." Utility plus speculation still equals a security when the economic reality is an investment. Directly relevant to the stablecoin and "digital tool" taxonomy debates.

Mortgage relevance

Minimal: token-classification precedent.

Operator-verify. This is a point-in-time summary, not legal advice. Quotes are sourced to the URLs above and have not yet been mechanically confirmed against the official opinion. Confirm any quote and holding against the court’s published opinion before relying on it.