These extreme fluctuation came after New Hampshire Federal Judge Paul J. Barbado ruled that LBRY had indeed broken U.S. securities laws by selling LBC without first registering with the SEC, which sued the crypto startup in March of 2021 on that very precedent.
In its defense, LBRY argued that LBC functions as a digital currency that plays an essential role in securing the LBRY blockchain. The firm claimed that the SEC’s attempt to label LBC as a security “violates its right to due process”, as the agency had failed to give “fair notice that its offerings of LBC are subject to the securities laws”.
According to Judge Barbado, however, LBRY’s claim to fair notice was unfounded due to the SEC basing its argument on “a venerable Supreme Court precedent that has been applied by hundreds of federal courts across the country over more than 70 years”.
The judge further underlined that, by linking the startup’s financial future to the success of the token, “LBRY made it obvious to its investors that it would work diligently to develop the Network so that LBC would increase in value”.
“Because no reasonable trier of fact could reject the SEC’s contention that LBRY offered LBC as a security, and LBRY does not have a triable defense that it lacked fair notice, the SEC is entitled to judgment,” the judge concluded.
LBRY responded to the ruling with an apology to users that it lost the case, but warned that the language used in the ruling sets “an extraordinarily dangerous precedent that makes every cryptocurrency in the US a security, including Ethereum”.
Jeremy Kauffman, the Founder of LBRY, asserts that the ruling “threatens the entire US cryptocurrency industry” and that “the future of crypto now rests with an organization worse that the SEC: the U.S. Congress”.
LBRY remains determined, stating that it will “lick our wounds for a little bit but we’re not giving up”, implying the potential for further legal action.
With this ruling, the case will not go to trial, and the next steps are set to be presented on November 21st.
Sourced from dailycoin.com.
Written by
by Rue Abernai on 2022-11-08 13:15:56.
