US SEC accepts LBC token is not a security, renews hope of Ripple’s win in XRP community


  • 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. 

Also read: Jim Cramer believes bulls could party on US Federal Reserve decision, here’s why Bitcoin could fall instead

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. 

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. 


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

Celebrity meme coins controversy continues amid Pump.fun revenue dominance

Celebrity meme coins controversy continues amid Pump.fun revenue dominance

Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.

More Meme Coins News

PEPE's on-chain metrics indicate potential rally after weeks of silence

PEPE's on-chain metrics indicate potential rally after weeks of silence

PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.

More Pepe News

Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF

Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF

Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.

More Ethereum News

Crypto community blasts Polkadot following report of treasury spending

Crypto community blasts Polkadot following report of treasury spending

Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.

More Polkadot News

Bitcoin: BTC price correction could end in July, according to seasonal data

Bitcoin: BTC price correction could end in July, according to seasonal data

Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.

Read full analysis

BTC

ETH

XRP