- SEC was awarded summary judgment qualifying each LBC token sale as an investment contract
- Attorney convinced court securities are different from LBC's secondary market transactions
The United States Securities and Exchange Commission (SEC) went on record stating that selling LBRY tokens in the secondary market wasn’t tantamount to a security. The case was settled during an appeal hearing on January 30.
Attorney John Deaton managed to settle a key debate in what was perceived by many crypto community members as a victory for the whole industry against SEC’s excessive regulation, CoinTelegraph wrote.
Fighting the ambiguous injunction
In the hearing on November 7, SEC was awarded summary judgment, which qualified each sale of the LBC token during a period of six years as an investment contract. The watchdog didn’t provide any specific information about the transactions. SEC hoped to be successful in attaining legitimacy in the secondary market and bringing it under its control too.
The SEC requested the New Hampshire district court to endorse the ambiguous and broad injunction banning sale of the token. However, Deaton disagreed and sought clarity for LBC secondary market transactions. He convinced the judge that securities are different from LBC’s secondary market transactions.
No distinction between management and users
The SEC’s requested order did not differentiate between LBRY, the management of the company, and the users to avoid clarifying LBC. The judge told Deaton he would make it clear that his order didn’t affect secondary market sales.
A relief for XRP holders
Many crypto community members were relieved by the ruling in the case, particularly XRP holders. The SEC is suing Ripple in a securities lawsuit over the sale of XRP tokens. This ruling, which stipulates that LBC token sale isn’t a security, can help the long-running Ripple lawsuit moving forward. According to XRP fans on Twitter, this judgment makes XRP a non-security as well.
