LBRY Credits and SEC reach settlement

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Updated February 1, 2023 | Published February 1, 2023

2 mins read

The pair have acknowledged that secondary market sales initiated by consumers do not equal securities sales by the company.

The US Securities and Exchange Commission (SEC) has reached an agreement in a case involving the sale of LBRY Credits (LBC) tokens on a secondary market, which the former contended constituted a security.

After a quick win last November, the regulator was hoping that it would be backed up, but a settlement had to be hammered out in the end, in which SEC acquiesced that its claim was not tenable.

As a result, the sale of LBC tokens on secondary markets do not constitute securities, an important result for the company, and the crypto community at large.

Even though the case took a long time to settle, attorney John Deaton managed to argue the case for the token, involving tech journalist Naomi Brockwell who sat in as an amicus curia and offered expertise, explaining the model of operation of LBC and its secondary market transactions, and why it would not constitute a security as SEC originally contended it to be.

Ultimately, the case was reviewed by a New Hampshire district court judge who accepted the arguments by the defense, saying that SEC did not make a distinction between LBC’s management, and the consumers who were entitled to move the tokens through secondary markets as they saw fit. Therefore, the judge said, the tokens were not a security.

This case helps clear up uncertainty about the way SEC treats cryptocurrencies, with many digital assets dubbed securities without any apparent logic behind this motivation.

SEC recently fell short of bringing down Ripple Labs, accusing the company of unauthorized sales of securities.

Crypto communities are encouraged that the regulator will now be motivated to define what crypto assets are securities so that it can avoid further legal clashes that may ultimately backfire and undermine its own reputation.

Looking for your next crypto casino? Check out: Bitcasino, Gamb.co or FortuneJack.

Written by Alex

Reporter

Alex is a well-rounded crypto writer who focuses on general market and legal developments. His main interest lies in how crypto gaming can become a more permanent part of the gaming landscape and how blockchain holds benefits to players they are not even aware of.
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