The U.S. Securities and Exchange Commission (SEC) has recently filed several lawsuits against crypto companies for allegedly selling equity-like products, i.e., unregistered securities. The most high-profile case is the SEC’s lawsuit against Ripple, expected to be settled by the end of March 2023 after years of litigation.
In the meantime, the verdict has been reached in the SEC‘s lawsuit against LBRY Credits, which is also accused of selling the LBC token as a security. The judge had ruled in November that the token was indeed an investment contract. However, the judge clarified that the first ruling did not refer to sales on the secondary market. This was a victory for the LBRY community.
LBRY stated in a tweet that this was not a real victory, as “we have not won yet.” This was because “third parties (exchanges, etc.) are still too afraid of the SEC to deal with it.”
The fact that LBRY Credits won this significant victory against the SEC, forcing the SEC to acknowledge that LBC is not a security, has sparked enthusiasm among Ripple users and especially attorney John Deaton. He pointed out that LBC is a pure utility asset and wondered in a tweet, “how many professional traders or retail investors are speculating on the price of LBC,” a token that can be equivalent to a tenth or a penny of cryptos like ETH and XRP.
The fact that the court ruled that LBC is not a security in the secondary market could be a glimmer of hope for Ripple to win its case against the SEC. After all, the Ripple community has always maintained that the XRP token is not a security. Therefore, this ruling could be the “final piece of the puzzle” for the SEC in its case against Ripple.
However, this is not the first time John Deaton has spoken out and said Ripple would win the case. Last month, Deaton tweeted that “the SEC‘s allegations are overblown.”
