On November 7, 2022, the United States District Court ruled in favor of the Securities and Exchange Commission in its lawsuit against LBRY.
In agreement with the US SEC, district judge Paul Barbadoro ruled that the LBC token, the native coin of LBRY, is a security token.
The judge ruled based on the fact that the platform issued its tokens as security to the public without proper registration, violating US law, which prohibits such acts.
Further, the judge said no jury in their right senses would side against the SEC in their allegations against the crypto platform.
Jeremy Kauffman, CEO of LBRY, was unhappy with the court’s decision and stated that this singular ruling threatens the US crypto industry; if care is not taken, several lawsuits from the SEC will spring up to claim that almost all crypto assets are securities.
The crypto community shares the same sentiments with Jeremy; a Reddit post on the same day of the ruling talks about how the SEC victory is a big blow to the industry.
Furthermore, LBRY is a household name and one of the industry’s pioneer chains, employing POW to achieve consensus.
Crypto assets like Ethereum, the second largest asset in the industry, and Doge can also be classified as security tokens according to the standard with which the judge ruled the case.
Therefore, this ruling runs deep and may well determine the fate of cryptocurrency assets in the country.
The users who commented on the post had mixed feelings. Some believed they had it coming to them and that several crypto assets have deviated from the standards of Bitcoin founder Satoshi Nakamoto.
Others believed all this happened because the crypto industry was under governmental regulation and the industry was regulating itself. There won’t be a need for government intervention.
Others were concerned about ICOs and pre-mined coins because they believed this new ruling would make them the next target.
LBRY, in a tweet on November 7, aired their views about the ambiguity of the whole situation, stating that no one knows how to launch a public blockchain platform in the United States legally.