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. This development has sparked speculation among crypto enthusiasts, particularly within the XRP and Ripple community, regarding the potential implications for the ongoing SEC vs. Ripple lawsuit.
LBRY has been ordered to permanently cease participation in unregistered offerings of crypto asset securities. Furthermore, the company has been slapped with a civil penalty of approximately $111,614k, despite its lack of means to pay the entire sum.
The injunctive relief would be a BIG problem for Ripple since it would enjoin sales from escrow. But it’s a problem with a possible solution – just a workaround that might interfere with Ripple’s business plans.
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No ruling on secondary market sales is a “status quo” ruling.
— Jeremy Hogan (@attorneyjeremy1) July 11, 2023
Legal analyst Jeremy Hogan has analyzed the LBRY case within the context of the SEC vs. Ripple lawsuit, shedding light on the potential similarities. According to Hogan, there is a possibility that Judge Torres, 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.
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, already on edge, is 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.
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. As the outcome of the SEC vs. Ripple lawsuit looms, the community remains poised for any possible repercussions that could impact Ripple and its XRP holdings.
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