Is Crypto in Danger After LBRY Lost to SEC?

Crypto company operating LBRY, a peer-to-peer digital marketplace Lost a legal battle with the U.S. Securities and Exchange Commission (SEC)A regulator has filed a lawsuit against the cryptocurrency platform for allegedly illegally selling an unregistered security, the native token LBRY Credit (LBC).

The team behind LBRY shared the news with followers via social media regretting the outcome. I thought it was one of the measures.

Everything But Bitcoin, LBRY Incident Could Shape Crypto Regulation

According to the court’s decision, LBRY’s legal representatives failed to provide a “reasonable judge of fact” or sufficient evidence to dismiss the SEC charges. Additionally, the judge ruled that the SEC gave the crypto companies fair notice of the classification of the token LBC.

Bitcoinist reported that the LBRY v. SEC case began in 2021, months after the Ripple lawsuit. The crypto firm claimed that its native token, his LBC, was created for utility, not monetary purposes.

In that sense, they argued that it never served as security. did not. So LBC acted as a security. In that sense, the team behind LBRY said:

Lick your wounds for a little while, but don’t give up. We have a talented team, tens of millions of content, hundreds of thousands of creators and one of the most popular web3 apps in the world. The best is yet to come.

What will be the impact on the crypto industry?

In the crypto community, this decision is seen as a bad outcome for US law regarding cryptocurrencies. Many believe that the lawsuit will set a bad precedent for domestic emerging industries and make it difficult for other projects to issue tokens. Some believe that court rulings do not affect regulation.

Legal expert Gabriel Shapiro, General Counsel for Delphi Labs, said: Said:

Dictated, here LBRY judges say that even if the team is completely silent about their efforts (no promises, no contracts), even if they are mining tokens upfront, that alone will pass the Howie test. We believe that we can expect substantial profits from our joint corporate efforts to result.

Shapiro sees no reason to appeal the decision. However, this result will be challenged by an industry that is still in its infancy.Lawyer Louis Cohen, on the other hand, Said:

The concern is certainly understandable, but not too pessimistic. The LBRY court did not provide a meaningful forensic analysis to reach the conclusion that the LBRY token is a security. The decision cited as authoritative a single case, Warfield v. Alaniz, 569 F.3d 1015 (2009).