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Qadir AK
Qadir AK
Author
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jul 12, 2023 05:52 UTC
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Could the LBRY vs SEC Ruling Change the Game for Ripple? Jeremy Hogan Raises Alarms
LBRY, a cryptocurrency platform, has been found in violation of the SEC Act.
The company has been ordered to permanently cease participation in unregistered offerings of crypto asset securities.
The ruling could have major implications for the ongoing SEC vs. Ripple lawsuit.
In a recent ruling, United States District Judge Paul J. Barbadoro found LBRY, a cryptocurrency platform, in violation of the United States Securities and Exchange Commission’s (SEC) Act. The ruling has sparked speculation among crypto enthusiasts, particularly within the XRP and Ripple community, regarding the potential implications for the ongoing SEC vs. Ripple lawsuit.
What’s the hype about? Let’s dive in.
Understanding the LBRY Conflict
The court found that LBRY’s issuance of its LBC token constituted a sale of unregistered securities. As a result, the company has been ordered to permanently cease participation in unregistered offerings of crypto asset securities. Additionally, LBRY has been slapped with a civil penalty of approximately $111,614k.
Legal analyst Jeremy Hogan has analyzed the LBRY case within the context of the SEC vs. Ripple lawsuit. Hogan believes that there is a possibility that Judge Torres, who is presiding over the Ripple case, may issue a similar ruling. However, the court would need to determine that past and present sales of XRP are investment contracts in order to provide comparable injunctive relief as seen in the LBRY case.
Implications of a Ruling Against Ripple
The implications of such a ruling, termed “injustice relief” by Hogan, could be devastating for Ripple and its XRP escrow holdings. Ripple, like LBRY, issues tokens (XRP) to support its business structure. Notably, the Ripple escrow account holds nearly half of the total XRP supply.
The XRP and Ripple community is already on edge, eagerly awaiting the final ruling in the SEC vs. Ripple case. With all submissions now filed with the court, a decision is expected to be announced imminently. While the community remains hopeful for a positive outcome, they are also preparing for potential adverse consequences in light of the LBRY ruling.
Related: Ripple Vs SEC News: Why Did Judge Torres Delay the Lawsuit Ruling? Pro-XRP Lawyer Answers
The LBRY case serves as a precedent, emphasizing the significance of the court’s determination on whether XRP sales constitute investment contracts. The ruling’s implications on LBRY have further heightened concerns within the Ripple community.
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