The US Securities and Exchange Commission has settled its lawsuit against LBRY Inc. and accepted that the token in itself is not a security.
Attorney John Deaton cited a paper by contract attorney Lewis Cohen and persuaded the judge that secondary market transactions of LBC were not securities.
Experts in the XRP community believe the SEC’s remarks could help ensure Ripple’s win in the lawsuit brought by the financial regulator.
US financial regulator settled its case against LBRY Inc making XRP holders in the Ripple community hopeful. Since the case brought by the Securities and Exchange Commission against LBRY Inc. was similar to its lawsuit against payment giant Ripple, XRP Army monitored the results closely.
US SEC settles case against LBRY Inc
Ripple community considers SEC’s settlement in its lawsuit against LBRY Inc. a victory for the entire crypto industry. Attorney John Deaton, the founder of media outlet CryptoLaw represented tech journalist Naomi Brockwell as an amicus curiae, and sought clarity for LBC secondary market transactions.
Deaton believed that the injunction was ambiguous and broad. As an individual that is not a party to the case but is permitted to assist a court by offering information and expertise, Deaton cited a paper by commercial contract attorney Lewis Cohen that examined all security lawsuits in the U.S. since the SEC vs. W.J. Howey Co case.
No court acknowledged that the underlying asset was security at any point throughout Cohen’s examination of security cases in the US. Deaton’s argument persuaded the judge that LBC’s secondary market transactions were not securities.
The SEC requested an order that does not make a distinction between LBRY, the company’s management, and users who purchased LBC in the secondary market. The judge turned to Deaton and said:
amicus, I’m going to make it clear that my order does not apply to secondary market sales.
XRP Army expects Ripple’s win against the SEC after the key judgment
The recent ruling came as a relief for XRP holders and the community. The cross-border payment remittance platform is currently facing a securities lawsuit from the SEC over the sale of XRP tokens.
First word from the SEC v. LBRY hearing:
The SEC admitted on the record that the token itself is not a security.
Good job Mr. Deaton! https://t.co/tRXIQs5SSu
— Jeremy Hogan (@attorneyjeremy1) January 30, 2023
The ruling indicates LBC token sale in the secondary market doesn’t qualify as securities and this argument can work in favor of the long-running SEC v. Ripple lawsuit. Experts believe this implies, XRP, the native token of XRPLedger, is not a security.
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