Could XRP Follow Low-Cap Crypto Assets After Contentious SEC Decision?
New developments in LBRY’s fight with the U.S. SEC have caused its native token, LBC, to skyrocket.
In November of last year, a federal judge ruled that the file-sharing and payments protocol broke securities laws when it sold LBC. This meant that the protocol lost a court case with the SEC.
Ripple and XRP supporters have been paying attention to LBRY’s fight with the SEC because their own community is still going through a similar fight with the same agency. Ripple Labs was accused of selling XRP as an unregistered security in late 2020.
After winning the lawsuit, the SEC wanted the judge to make it clear that LBC was an unregistered security both when it was sold directly by LBRY and when it was sold again by other people. But the judge is said to have said that his decision against LBRY does not apply to sales on the secondary market. This means that LBC is probably not a security.
John Deaton, who was an amicus in Ripple’s lawsuit and spoke in court on behalf of LBRY and XRP holders, said in a recent video update that the judge made it clear that his ruling does not apply to sales on the secondary market.
“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 the time of this writing, LBC has gone up more than 140% in the last three days. At one point, it went up more than 219% as it soared from $0.0103 to $0.0329. Even after the rally, its market cap is only $17.8 million, and it is still 98% below its all-time high.
Jeremy Hogan, a crypto legal expert who is known for keeping up with the Ripple lawsuit, asked what the LBC ruling and the price rise that followed it meant for XRP, since Ripple is a much bigger and more profitable company.
“Below is the LBC weekly chart (up 100%) and LBRY completely lost the SEC lawsuit and is going into bankruptcy.
