LBRY Credits’ Win Against SEC Ignites Hope for the XRP Community

cryptonews.com:

The US Securities and Exchange Commission (SEC) has been going after several crypto projects and companies for claiming that they are selling unregistered securities. In November last year, the SEC won a case against LBRY Credits, with the judge ruling that the LBC token was an investment contract. However, in a recent win for the LBRY community, the judge clarified that the ruling did not include secondary market sales.

Attorney John Deaton has settled a debate eminent in the LBRY vs. SEC lawsuit. The ruling made in favor of the SEC in November could have given the regulatory body legitimacy over the secondary cryptocurrency market. To this effect, the SEC asked the district court judge for New Hampshire to clarify the injunction prohibiting the sale of LBC.

Deaton’s argument revolved around previous lawsuits filed by the SEC. He referred to a paper written by commercial contract attorney Lewis Cohen, which assessed all the security lawsuits filed in the US since the SEC vs. Howey lawsuit. None of these lawsuits were ruled in favor of the underlying asset being a security.

Deaton made his case before the judge on why LBC secondary market sales could not be categorized as securities. He argued that the SEC failed to distinguish between the company’s management, users, and the token. After hearing Deaton’s argument, the judge ruled that the order given in November did not apply to secondary market sales.

The SEC filed a similar lawsuit against Ripple and its executives in December 2020. The regulator believes that XRP is a security, and its executives engaged in an unregistered securities offering.

In the recent ruling in the LBRY vs. SEC case, the judge ruled that the sale of the LBC token in the secondary market did not