SEC’s Win Against This Blockchain Firm in High-Profile Securities Case Unnerves XRP Army ⋆ ZyCrypto


Ripple Lawsuit: SEC Victory Against This Blockchain Firm In High-Profile Securities Case Makes XRP Army Nervous


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Ripple supporters have continued to be concerned by a recent US Securities and Exchange Commission (SEC) victory in a securities lawsuit filed against blockchain-based file-sharing network LBRY.

James Filan, a former federal prosecutor who has been updating the crypto community in the SEC vs Ripple lawsuit, shared the judgment detailing how the US regulator bagged the victory.

“Breaking: New Hampshire court finds LBRY offered LBC as security and fair notice defense fails”. Filan tweeted on Monday.

The SEC sued LBRY in March of last year, alleging that the network’s LBC tokens were securities and that the network violated the Securities Act by selling them without registering with the regulator. In response, LBRY argued that LBC was not a security and that the SEC had violated its due process rights by failing to give the network “fair notice” that its LBC offerings are subject to securities laws.

In handing down the sentence, Federal Judge Paul Barbadoro of the District Court for the District of New Hampshire noted that “No reasonable trier of fact could reject the SEC’s assertion that LBRY offered LBC as security, and LBRY has no actionable defense that it lacked fair notice.” before granting the SEC’s Motion for Summary Judgment.


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The case, which could have wide-ranging implications for the broader crypto industry, has dashed the hopes of crypto supporters who now fear a similar judgment could be made in the SEC v. Ripple given the obvious similarities between the two cases.

Like LBRY, the SEC has maintained that Ripple’s XRP tokens are securities and that the public sale of $1.3 billion worth of XRP was illegal. In response, Ripple and two of its top executives have refuted those claims, adding that they were not fairly notified by the regulator that Ripple Labs’ actions were illegal.

Since the case was filed in 2020, the cryptocurrency industry has been rallying behind Ripple, with more than a dozen entities filing amicus curiae motions in support. While most Ripple supporters have argued that securities laws have been applied unfairly to create industry-wide uncertainty, the regulator has maintained that “most” cryptocurrencies are securities.

However, commenting on the SEC victory, John E. Deaton of “CryptoLaw” advised against concluding the outcome of Ripple’s lawsuit, suggesting that the court may rule differently.

“I would suggest that the industry wait for a decision in the Ripple case before deciding that the sky is falling. Ripple has advanced arguments that

LBRY lawyers do not…” Deaton wrote.