XRP fate hangs in balance after SEC vs LBRY judge fails to rule on LBC token status


  • The final ruling in the SEC vs LBRY case is in. 
  • Presiding Judge Barbadoro refused to clarify whether LBC token is a security. 
  • The Judge exercised judicial restraint, differing from January’s hearing where Deaton had persuaded the judge that secondary market sales did not involve securities.
  • XRP holders await Judge Analisa Torres' ruling in the SEC vs Ripple lawsuit amidst the conservative outcome in the SEC vs LBRY case.

Paul Barbadoro, the presiding Judge in the SEC vs LBRY case, took a completely different stance on the status of LBC token being or not a security than the one he had taken in the January ruling. Back then, it had been clarified that the judge’s order does not apply to secondary market sales of the LBC token. In the final ruling on July 11, Judge Barbadoro decided to exercise judicial restraint and refused to comment on the status of the LBC token as a security or non-security in secondary market transactions.

The SEC vs Ripple lawsuit has a similar situation where XRP holders are awaiting the judge’s clarification on secondary market sales of the token. XRP token’s fate therefore hangs in the balance until Judge Analisa Torres releases the verdict.

Also read: Pro XRP attorney John Deaton claims there is nothing strange in the delay of SEC vs. Ripple lawsuit outcome

SEC vs LBRY ruling is out, XRP holders are disappointed 

The community of XRP holders have closely watched the SEC vs LBRY case for two reasons. Pro XRP attorney John Deaton’s involvement as amicus in both cases generated interest and hope in the Ripple community, awaiting a ruling on the status of the LBC token, as a “non-security.”

The second key reason is XRP holders expect Judge Analisa Torres to comment on the status of secondary market sales of the altcoin and rule whether XRP is a security in these transactions. This directly affects XRP holders as they have engaged in purchase/ sell of the altcoin on cryptocurrency exchange platforms. 

FXStreet has covered the SEC vs LBRY case in detail here.

What’s next for the XRP community

Attorney John Deaton, an amicus curiae or friend of the court in both the SEC vs LBRY and SEC vs Ripple lawsuits, claims that the development is troubling and shared his thoughts in a recent tweet:

Deaton has assured XRP holders that in the final ruling by Judge Torres he will ask the judge for clarification on the secondary market sales of the altcoin XRP. However, the recent verdict in SEC vs LBRY has made it more likely that Judge Torres could refuses to rule on the status of XRP as a security, citing it as an issue that was not litigated.

SEC vs Ripple lawsuit FAQs

Why are the US Securities and Exchange Commission and Ripple litigating?

The United States Securities and Exchange Commission (SEC) brought charges against Ripple and its executives alleging that the cross-border payment settlement firm raised more than $1.3 billion through an unregistered asset offering of the XRP token. Ripple argues that XRP should not be treated as a security or an investment contract, just like the SEC looks at Bitcoin or Ethereum, citing views from former SEC Director of Corporation Finance William Hinman.

When did the SEC vs. Ripple court case start?

The SEC charges were made public in December 2020. The long-running litigation, presided by Judge Analisa Torres, seems to be close to its end as both parties fail to reach an agreement.

What are the effects on XRP price?

Ripple is the largest holder of the altcoin XRP. The SEC’s charges against Ripple resulted in a mass delisting of XRP across crypto exchange platforms and a sharp decline in the token’s value, which used to be the third crypto asset by market capitalization after Bitcoin and Ethereum. A positive outcome for Ripple in its case against the SEC would benefit XRP’s price, while a SEC win is likely to weigh further on the asset, experts say.

Which implications could the ruling have on the overall crypto industry?

The final verdict in the SEC vs. Ripple lawsuit is the most highly anticipated in the crypto ecosystem. The lawsuit is expected to set precedent for other open cases that affect dozens of digital assets. A ruling in favor of the SEC would most likely bring further regulation to the sector as it would classify most tokens as securities. On the contrary, Ripple’s win would be interpreted as a validation of the crypto markets and could boost investors' confidence if current legal uncertainties surrounding digital assets in the US are solved.

What about secondary sales of XRP among traders?

The ruling may also include views over XRP secondary sales, which directly affects investors who trade XRP on cryptocurrency exchange platforms. Pro-Ripple attorney John Deaton, who filed an amicus brief in the SEC vs. Ripple case, suggests this matter is likely to be addressed. A ruling stating that secondary sales don't qualify as securities, contrary to what the SEC claims, is likely to be beneficial for XRP.


Like this article? Help us with some feedback by answering this survey:



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

MANTA suffers 4% pullback after unlocking tokens worth $40 million

MANTA suffers 4% pullback after unlocking tokens worth $40 million

Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks. 

More Cryptocurrencies News

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30. 

More Ripple News

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Merlin chain’s TVL added 20% this week, and crossed $800 million on Thursday. Bitcoin Layer 2 assets noted double-digit losses in the past week. Stacks, Elastos, SatoshiVM, BVM are hit by a correction as Bitcoin hovers around $61,000. 

More Bitcoin News

If Bitcoin restarts bull run, these altcoins are likely to explode Premium

If Bitcoin restarts bull run, these altcoins are likely to explode

If Bitcoin’s consolidation ends and the bull run resumes, altcoins are likely going to trigger a massive rally. Last cycle’s hot tokens like SOL, AVAX, WIF, ONDO, etc., could see renewed enthusiasm. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. 

Read full analysis

BTC

ETH

XRP