Ripple and XRP Hold Their Breath as Judge Holds Off Judgment on LBRY Credits

US court ruling on LBRY Credits’ security status may impact Ripple’s upcoming case, setting legal precedent.

Brad Garlinghouse holding his mouth shut.
Created by Kornelija Poderskytė from DailyCoin
  • A US district court judge has refused to rule on the status of LBRY Credits (LBC) as a security.
  • Judge Barbadoro has avoided taking a stance on the registration requirement for secondary market offerings of LBC.
  • Judge Analisa Torres’ ruling in the Ripple case is expected in the next couple of months.

Ripple finds itself in suspense as a United States district court judge refrains from passing judgment on whether the secondary sale of LBRY Credits (LBC) can be classified as a security.

How the Ruling on LBRY May Influence the Ripple Case

On July 11th, Judge Paul Barbadoro, presiding over the U.S. District Court for the District of New Hampshire, delivered his ruling in the case brought by the United States Securities and Exchange Commission (SEC) against LBRY, the decentralized content platform.

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This ruling potentially sets a legal precedent for Judge Analisa Torres, who will soon decide the fate of the SEC’s case against Ripple.

Judge Barbadoro, in his ruling, tactfully stated, “Accordingly, I take no position on whether the registration requirement applies to secondary market offerings of LBC.” It is important to note that a secondary market pertains to trading securities among traders, while a primary market involves direct trading from the issuing company.

John Deaton Challenges SEC’s View on LBC Token Sales

John Deaton, a U.S. attorney representing a multitude of XRP token holders, took to Twitter on July 11th to reach out to Barbadoro, seeking clarification on whether LBC should indeed be considered a security.

Ultimately, Barbadoro chose to adhere to his “judicial restraint,” as Deaton revealed. This is a significant shift from Barbadoro’s previous stance during a January appeal hearing, where Deaton successfully argued that the secondary sale of LBC does not qualify as a securities offering. 

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In the appeal hearing, the New Hampshire judge emphasized that LBC can only be classified as a security when sold directly. Furthermore, even the SEC conceded that secondary market LBC sales do not fall under the category of securities.

On the Flipside

  • The lack of a clear stance from the court may create confusion and hinder regulatory efforts to establish a cohesive framework for classifying digital assets.
  • Judge Paul Barbadoro’s decision to withhold judgment on the secondary sale of LBC as a security leaves room for ambiguity and could lead to inconsistent rulings in similar cases.

Why This Matters

As Ripple eagerly awaits its case verdict, this decision potentially sets a precedent that could impact the legal outlook for Ripple and other cryptocurrencies facing similar regulatory challenges.

To learn more about how XRP whales capitalize on price fluctuations, read here:

XRP Whales Capitalize on Price Fluctuations to Tune of $570M

To stay updated on the latest insights regarding spot Bitcoin ETFs, including the perspective of an ex-SEC chair, check out:

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FAQs

Who is Paul Barbadoro?

Paul Barbadoro is a United States district court judge presiding over the U.S. District Court for the District of New Hampshire. He is known for his role in various legal cases and rulings within his jurisdiction.

Why is LBRY being sued?

LBRY, the decentralized content platform, is being sued by the United States Securities and Exchange Commission (SEC). The SEC has taken legal action against LBRY, alleging that certain aspects of its operations and the sale of LBRY Credits (LBC) qualify as securities offerings and should be subject to regulatory oversight.

What is the library token?

The library token, or LBRY Credits (LBC), is a digital asset associated with the LBRY platform. It serves as a means of exchange within the LBRY ecosystem, enabling users to access and reward content creators on the platform. LBRY Credits are at the center of the legal dispute between LBRY and the SEC, as their classification as securities is under scrutiny.

What is the Ripple court case about?

The Ripple court case involves a legal battle between Ripple, a blockchain technology company, and the United States Securities and Exchange Commission (SEC). The SEC has accused Ripple of conducting an unregistered securities offering by selling its digital asset, XRP. The court case seeks to determine whether XRP should be classified as a security under U.S. securities laws.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.