LBRY’s native token LBC is in the midst of a parabolic run-up following new developments relating to its battle with the U.S. Securities and Exchange Commission (SEC).
The file-sharing and payments protocol lost a court case with the SEC in November of last year after a federal judge ruled that it violated securities laws when it sold LBC.
LBRY’s battle with the SEC has captured the attention of Ripple and XRP supporters as their own community continues to weather a similar battle with the regulator, which accused Ripple Labs of issuing XRP as an unregistered security in late 2020.
After winning the lawsuit, the SEC hoped to get clarity from the judge that LBC qualified as an unregistered security both during LBRY’s direct sale of the token, as well as secondary sales. However, the judge has reportedly stated that his ruling against LBRY does not apply to secondary market sales, implying that LBC is not a security.
John Deaton, who represented XRP holders in Ripple’s lawsuit as an amicus and also spoke in court on behalf of LBRY, said in a recent video update that the judge clearly stated that his ruling did not apply to secondary market sales.
“Then he looked at me and said, ‘Amicus… I’m going to make it clear that my order does not apply to secondary market sales.’ He goes, ‘so that should satisfy you right?’
I stood up and I said, ‘Great… If you would consider some language on how the token itself is not a security?’ And he smiled and said ‘Well I’m a minimalist.’ And so he left it open there, but when you think about it, if he’s saying secondary market sales aren’t in play, then the token itself can’t be a security. If the token itself is a security, then that means whenever it’s sold it would be a security.”
At time of writing, LBC is up over 140% in the last three days, and at one point was up over 219% as it skyrocketed from a low of $0.0103 to $0.0329. It currently has a market cap of only $17.8 million and is still 98% down from its all-time highs, despite the rally.
Crypto legal expert Jeremy Hogan, known for following the Ripple lawsuit, asked what the LBC ruling and its subsequent price rally meant for XRP, given that Ripple is a much bigger, profitable firm.
“Below is the LBC weekly chart (up 100%) and LBRY completely lost the SEC lawsuit and is going into bankruptcy.
What does this mean vis-à-vis XRP?
Asking for a friend. :)”
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Featured Image: Shutterstock/korrakot sittivash
