Safety tokens, nonetheless, are struggling amid a scarcity of regulatory readability, and the all-too-familiar regulation-by-enforcement method of the U.S. Securities and Alternate Fee (SEC). To select an instance, beginning in 2016 LBRY – a decentralized storage protocol and media service – financed its growth via the difficulty of LBC tokens, which might allow entry and engagement as soon as the platform was up and working. For a lot of, these have been clearly utility tokens since they enabled use of the service. For the SEC, they have been safety tokens since their subject financed the mission. In 2021 the regulator introduced an enforcement motion towards LBRY. The issuer pushed again, however in November a decide dominated within the SEC’s favor.
