Short answer: it may harm crypto but not blockchain. A US federal judge of a District Court in New Hampshire ruled today, November 7, 2022 that Crypto startup LBRY violated securities laws by selling its native LBC tokens without registering with the U.S. Securities and Exchange Commission (SEC). As reported by CoinDesk, LBRY founder Jeremy Kauffman made the following statement in an email: “The SEC vs LBRY case establishes a precedent that threatens the entire US cryptocurrency industry. Under the SEC vs LBRY standard, almost every cryptocurrency, including Ethereum and Doge, are securities. The future of cryptocurrency in the US now rests in with an organization even worse than the SEC: the United States Congress,” Kauffman’s statement is meant to be a warning about the case’s having a broader negative impact on the industry. But the problem is that he is simply telling the truth about almost every cryptocurrency being a security. LBRY case indicates that the SEC is trying to enforce the security laws against crypto coins and tokens. Meanwhile, the more significant case is the pending SEC v. Ripple. Based on the law, Ripple’s substantive arguments that XRP is not a security are quite week. If Ripple wins the case, it could win on a nonsubstantive procedural ground. Ripple has argued that SEC failed to give them ‘fair notice’, and also that SEC’s act is selective prosecution, and the court has allowed such arguments to proceed.
Full opinion : Is SEC harming ‘crypto’ by enforcing the securities laws?
