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The judge presiding over the trial of the sec against the distributed publishing platform lbry found that secondary sales of lbc are not admissible like the sale of securities.
Judge Rules Against SEC
The US Securities and Exchange Commission (SEC) has been pursuing legal action against the crypto company LBRY Inc. On January 30, the guard dog appealed a restraining order to prevent the secondary sale of LBRY Credits (LBC) cryptocurrency. However, the presiding judge has determined that the secondary sale of these cryptos is not the sale of a security.
Former judgment Favored SEC.
The issue between the financial regulatory body and the crypto firm began in March 2021, when the first filed an LBRY complaint, accusing him of having raised $11 million by selling the AML token as "unregistered collateral". Although LBRY did not provide tokens to the public during a first coin issue (ICO), The SEC noted that the team had kept tokens for itself in a "pre-mine", which was then distributed on secondary exchanges to finance operations.
The summary judgment of the court, in this case, favored the SEC, where the initial sale of the LBC tokens was classified as investment contracts. Encouraged by this decision, Monday's judicial appeal for a decision that would ban all sales of AML chips.
"Summary Decision Not For Secondary Sales"
However, the plan backfired because the judge clarified that the previous decision only applied to the sale of the chip directly. For secondary sales and security prosecutions in the United States, no court had ever recognized an underlying asset as a security since the "how" test was created. Reportedly, The judge pointed out that the interlocutory judgment did not apply to sales on the secondary market and that he would not issue the injunction requested by the sec as He understood second-hand selling.
SEC Vs. Ripple
It was a common approach for the SEC to charge crypto companies with offering tokens as "unregistered titles." The watchdog is already in a legal battle with Ripple's leading cryptocurrency, claiming that he has distributed his XRP chips as unregistered titles. Consequently the recent decision in dry vs. Lbry case could benefit ripple, which also had never held a bid for initial part.
The SEC is already struggling in its case against Ripple, as recently, in September, the case judge ruled the Hinman documents to be admissible evidence. These documents demonstrate that the SEC has taken selective enforcement measures and has not considered the XRP to be the same as the EPF.
