SEC’s Victory Against This Blockchain Firm In High-Profile Securities Case Unnerves XRP Army ⋆ ZyCrypto

Ripple supporters have continued to fret over a recent US Securities and Exchange Commission (SEC) victory in a securities lawsuit against blockchain-based file-sharing network LBRY.

James Filan, a former federal prosecutor who has been updating the crypto community on the SEC vs Ripple lawsuit, shared the ruling detailing how the US regulator won the victory.

“Breaking: New Hampshire Court Finds LBRY Offered LBC as Collateral and Fair Notice Defense Fails.” Filan tweeted on Monday.

The SEC sued LBRY last March, alleging that the network’s LBC tokens were securities and that the network violated the Securities Act by selling them without registering with the regulator. In response, LBRY argued that LBC was not a security and that the SEC had violated its right to due process by failing to provide the network with “fair notice” that LBC’s offerings are subject to securities laws.

Federal District Judge Paul Barbadoro of the District Court for the District of New Hampshire noted in handing down the sentence. “no reasonable plaintiff could rebut the SEC’s allegation that LBRY offered LBC as collateral, and LBRY does not have a pretrial response that it lacked fair notice,” before granting the SEC’s motion for summary judgment.

The case, which could have far-reaching implications for the broader crypto industry, has dampened the hopes of crypto supporters who now worry that a similar ruling could be passed in SEC vs. The Ripple lawsuit given the stark similarities between the two cases.

Like LBRY, the SEC has argued that Ripple’s XRP tokens are securities and that the sale of $1.3 billion worth of XRP to the public was illegal. In response, Ripple and two of its top executives have refuted those claims, adding that the regulator did not give them fair notice that Ripple Labs’ actions were illegal.

Since the case was filed in 2020, the crypto industry has rallied behind Ripple, with over a dozen entities filing amicus curiae briefs in support. While most Ripple supporters have argued that securities laws have been unfairly used to create uncertainty for the entire industry, the regulator has maintained that “most” cryptocurrencies are securities.

Commenting on the SEC’s victory, however, “CryptoLaw’s” John E. Deaton advised against jumping to conclusions about the outcome of the Ripple lawsuit, suggesting that the court may rule differently.

“I would suggest that the industry wait for a decision in the Ripple case before deciding that the sky is falling. Ripple has advanced arguments like

LBRY’s lawyers did not …” Deaton wrote.