The SEC’s Lawsuit Against LBRY Is Just Like XRP’s Lawsuit: Full Of Illogical Claims!• May 11, 2022 3:32 pm • Comments
As the Ripple lawsuit against the SEC continues, the SEC has already made multiple arguments that have been inconsistent and hypocritical.
There is also another less well-known case that is exactly just like the Ripple lawsuit as well which is the LBRY vs. SEC case.
In this case, the LBRY coin is also being accused by the SEC as being a security instead of a digital asset which is similar to XRP’s current condition.
In this LBRY case, the SEC has made the claim that purchasing for usage is insufficient to make something not a security.
Going by the logic of that claim, LBRY has pointed out that everything would then be a security as well such as buying a house or baseball cards.
The SEC is being both intellectually dishonest, and lazy. https://t.co/42dmgeQff4
— John E Deaton (@JohnEDeaton1) May 11, 2022
A lawyer closely following the case has commented:
I have further considered the LBRY summary judgment motion and I observe that in relation to the Howey test the point of attack is that buyers used it not as an investment.
And what the Lawyers do is to attempt to distinguish the earlier cases on digital assets that had ICOs
Distinguishing an earlier decision even a binding precedent means arguing that the facts of your case are so different than the earlier case that the earlier case should not be followed and the court should in effect make a new precedent
This extract from the LBRY submission shows that this is what LBRY’s attorneys seek to do.
And the several points they raise are the fact LBRY had no whitepaper, had no ICO and that sales were to users on an already functioning usable network who used it on the network
LBRY in particular has a majority of people who are looking to use LBRY on the network and not just as a speculative asset which makes it most certainly not a security.
On LBRY’s Twitter page, the company also commented on the claims that were made by the SEC and questioned how is it that these claims don’t apply to other digital assets like Ethereum.
Specifically, it was mentioned that technically Ethereum also fits the criteria that the SEC has laid out when it gave its reasoning for why LBRY was considered a security.
As a result, the LBRY community is pointing out that the logic in the SEC’s claims are illogical and should not be able to hold its argument.
Unbelievably, these are the @SECGov charges against @LBRYcom. That it has used all profits to support the community & development of the network. That is what they are being charged. Meanwhile, the founders of Ethereum were talking on video about which islands they wanted to buy pic.twitter.com/djXS6jqp3R
— stefan huber.justice (@Leerzeit) May 10, 2022
Twitter comments include:
This case is so odd. It is the first instance of a decentralized, distributed network operated by a protocol coin that was initially distributed by proof-of-work, i.e. completely community driven and organic in how persons obtained $LBC.
It’s hard to overstate how broad and devastating this claim from SEC is.
If purchasing for usage is insufficient to make something not a security, then practically everything is a security.
Not just every cryptocurrency, but beanie babies, baseball cards, houses, etc.
As it stands, both the LBRY case and the Ripple case will have long-standing effects on how the future of crypto regulation will look like within the United States.
Overall, this is a cogent argument, relying on both expert and ordinary evidence, to show that the Howey test does not apply to LBC and that the LBRY case is very different to earlier ICO cases, from which decisions this matter should be distinguished. /8
— bill (@Belisarius2020) May 8, 2022
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