In a recent Twitter exchange, attorney John Deaton shared insights on his discussion with the judge regarding the LBC token, sparking a debate on the judge’s decision. Deaton had asked the judge to clarify that the LBC token is not a security, but the judge declined, citing non-litigation and exercising judicial restraint. Deaton acknowledged the judge’s conservative approach but noted that the decision does not automatically apply to the secondary market, seen as a positive outcome.
Respectfully John, I don’t think it is better than nothing. It is exactly what the SEC wants. It does not want the issue of secondary market sales or the issue whether the tokens themselves are securities decided until decisions are made in the cases against the exchanges. /1 https://t.co/sVnDAmsxep
— bill morgan (@Belisarius2020) July 11, 2023
Disagreeing with Deaton, Bill Morgan argued that the judge’s decision aligns with the SEC’s intention to postpone determining the securities status of tokens until exchange cases are resolved. Morgan expressed concern that the Ripple case may proceed to trial without a clear determination on XRP’s classification as a security.
Deaton Draws Parallels To Coinbase Case
I say it’s better than nothing because in the Coinbase case the SEC cited the LBRY Judge’s summary judgment Opinion and argued that he made no distinction between direct sales from the issuer (LBRY) and secondary sales on exchanges. This implies the Judge considered them all… pic.twitter.com/9XcGbyvNCz
— John E Deaton (@JohnEDeaton1) July 12, 2023
Deaton drew parallels to the Coinbase case, highlighting the value of the LBRY case’s recent development. He noted that Coinbase can now differentiate between direct and secondary sales, as the judge’s order does not apply to their transactions. While Deaton acknowledged this as an improvement, he recognized it falls short of a complete victory.
Morgan supported Deaton’s perspective, emphasizing its relevance to the Ripple case. He commended Deaton for pressuring the LBRY judge but expressed concerns that Judge Torres may evade addressing the matter, leaving the Ripple case without a clear determination.
These developments in the LBRY case offer limited clarity on token classification. However, the risk remains that the Ripple case could proceed to trial without a decisive ruling. The wider implications on the cryptocurrency market and regulatory oversight are yet to be fully understood.
Sohrab Khawas
Sohrab is a passionate cryptocurrency news writer with over five years of experience covering the industry. He keeps a keen interest in blockchain technology and its potential to revolutionize finance. Whether he’s trading or writing, Sohrab always keeps his finger on the pulse of the crypto world, using his expertise to deliver informative and engaging articles that educate and inspire. When he’s not analyzing the markets, Sohrab indulges in his hobbies of graphic design, minimal design or listening to his favorite hip-hop tunes.
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