SEC Injunction Denied
On January 30, a federal district court in the state of New Hampshire ruled that the sale of cryptoassets (virtual currency) library credits (LBCs) in the secondary market does not constitute an offer of securities, and the U.S. Securities and Exchange Commission (SEC ) denied the injunction sought.
In March 2021, the SEC filed a lawsuit against LBRY, alleging that LBRY’s LBC token sale between 2016 and 2021 was an unregistered securities sale. In November 2022, the court accepted the SEC’s argument and ruled that the six-year sale of LBC was an investment contract.
Relation:LBRY Co., Ltd. New Court Case in Token Securities Issue
The SEC had sought a broad injunction, including a suspension of the sale of LBC tokens, but that request was denied at Tuesday’s hearing. As a legal adviser (Amicus Crier), defense attorney John Deaton cited a legal paper analyzing 76 years of securities litigation in the United States. He argued that buying and selling LBC tokens on the secondary market is not a securities transaction.
Ultimately, the judge ruled in November that the investment contract was for tokens sold directly by LBRY and did not apply to secondary market sales.
People in the cryptocurrency industry have welcomed this decision, pointing out that it may have a significant impact on securities lawsuits filed by the SEC and Ripple. The SEC’s recent response to LBRY’s summary judgment 21 times indicates the importance the SEC attaches to this case. Attention will be paid to future developments.
What is LBC
LBC token is a virtual currency used in the electronic marketplace network “LBRY” for digital contents operated by the US company LBRY. Odysee, the decentralized video sharing platform, is the most well-known, offering a way for viewers to earn LBC as well as creators who post their work on Odysee.
LBC token is currently ranked 839th in the market capitalization ranking of cryptocurrencies. “You’ve never heard of a professional cryptocurrency trader,” Deaton said. “How many professional and retail investors are paying attention to LBC price fluctuations?” he asks, arguing that LBC is best called a utility token.
I hope @Patrick McHenry @RepFrenchHill @tommmer @Warren Davidson @RepHuizenga invite me to testify and I’ll submit the hearing transcripts as part of the record. Reading an American entrepreneur and the Judge pleading w/the SEC to give clarity w/the SEC refusing is powerful stuff. https://t.co/ bbfHRj08j5
—John E Deaton (@JohnE Deaton1) January 31, 2023
Deaton has called on pro-cryptocurrency legislators, including Chairman French Hill and Vice Chairman Warren Davidson of the U.S. House of Representatives Digital Assets Subcommittee, to be summoned as witnesses to the hearing.
We hope that the filing of the proceedings will shed light on the SEC’s refusal to seek clarity from an American entrepreneur (LBRY) and a judge. It seems
Relation:Responding to cryptocurrency-related policies, etc. US House of Representatives establishes “Digital Asset Subcommittee”