LBRY’s Legal Battle Raises Concerns For Ripple’s XRP Lawsuit

Prominent legal professionals specializing in the crypto industry have responded to a recent motion filed by LBRY, a sharing and publishing platform, in its ongoing legal battle with the US Securities and Exchange Commission (SEC). The motion has raised concerns among experts about its potential implications for the ongoing lawsuit involving Ripple’s XRP cryptocurrency.

LBRY’s Petition Against SEC

LBRY filed a supplementary brief supporting its petition to limit the remedies sought by the SEC in the case of SEC vs. LBRY. The platform emphasized its efforts to seek clarification from the SEC regarding the categorization of LBRY Tokens (LBC) in relation to the claims made against them. However, instead of providing an explanation, the commission pursued a general injunction.

Despite a favorable summary judgment verdict for the SEC last year, LBRY has requested the court to rule that secondary market transactions involving LBC are not securities. Lawyer Jeremy Hogan, a well-known supporter of XRP, has cautioned the XRP community to closely monitor the outcome of this case. He believes that the broad injunction request by the SEC in the LBRY case could potentially extend to the ongoing litigation against Ripple.

Challenging SEC’s Classification of LBC

Many crypto enthusiasts believe that the SEC’s claims are too broad and that the commission may classify secondary market trades as securities. Attorney Deaton, opposing the SEC’s use of “overreaching language” to classify secondary market transactions of LBC as securities, has obtained the court hearing transcript from January 30. According to Deaton, the judge clarified during the hearing that his injunction does not apply to resale transactions. Deaton has pledged to provide the LBRY hearing transcript in the coming weeks.

Bill Morgan, another attorney supporting XRP, has also commented on LBRY’s recent action. He believes that LBRY’s inquiry into the case at this advanced stage is a valid one. Morgan sees LBRY’s challenge to the SEC’s ability to apply the Howey test to digital assets like LBC as a strong argument.

Telling the court in effect it shouldn’t impose relief. If the judge decides the SEC has congressional authority to regulate digital assets it will not be helpful to Ripple and Coinbase even though it wouldn’t be a binding a decision. Whose funding the appeal. LBRY is insolvent/2

— bill morgan (@Belisarius2020) May 26, 2023

The response from these legal professionals underscores the significance of LBRY’s motion and its potential implications for the broader crypto industry. The outcome of the LBRY case could have far-reaching effects on how digital assets are regulated and classified by the SEC.