On Monday, crypto firm LBRY Inc. жоголгон its case against the Securities and Exchange Commission (SEC). LBRY was initially charged by the SEC in March 2021 for selling securities and failing to register with the commission.
The judge’s ruling found that investors in LBRY’s native token, LBC, were reasonably likely to take company communications as evidence that they could profit from owning its token.
It also found that LBRY Inc. would be incentivized to grow the value of its token because it had pre-mined and kept a significant stash of LBC for itself. The ruling emphasizes that even if some purchases of LBC were made to enjoy its utility in the protocol, that doesn’t mean that it’s not a security.
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Could LBRY’s case have repercussions for Ripple?
This decision has potential ramifications for protocols across the cryptocurrency space, as many teams choose to keep a portion of the initial token supply to help fund activities.
The SEC has been signaling since the DAO Report in 2017 that it could crack down on cryptocurrencies as unregistered securities. This included chairman Jay Clayton’s билдирүү that “every ICO I’ve seen is a security” in 2018, a sentiment колдоду by the current chairman Gary Gensler in 2021.
“If somebody is raising money selling a token and the buyer is anticipating profits based on the efforts of that group to sponsor the seller, that fits into something that’s a security, I’m not going to go token by token, you can imagine why I wouldn’t do that. But my predecessor, Jay Clayton… said it best about three years ago that he really hadn’t seen many tokens that didn’t meet that securities test.”
Source: https://protos.com/judge-rules-lbrys-token-is-a-security-what-about-xrp/