Ripple Triumphs in SEC Legal Battle as Blockchain Platform LBRY Shuts Down
Summary:
Ripple secured a significant legal victory against the U.S. Securities and Exchange Committee (SEC), leading to a withdrawal of all allegations against it. However, this positive development was overshadowed by blockchain platform LBRY announcing its closure due to debt. LBRY, like Ripple, was hit with a lawsuit by the SEC earlier over similar accusations. While Ripple, the fifth-largest cryptocurrency was able to fight back, LBRY, with a markedly lower market capitalization, chose not to challenge the SEC. Industry observers suggest that despite the recent win, Ripple's legal battles with the SEC are far from over.
Cryptocurrency enthusiasts were dealt both joyous and unfortunate news all at once. Ripple emerged victorious in court against the U.S. Securities and Exchange Committee (SEC), while blockchain platform LBRY announced cessation of operations, sparking different reactions from the community. The SEC's intent, announced on October 19, to withdraw all allegations against Ripple's CEO Brad Garlinghouse and executive chair Chris Larsen, was a milestone for the cryptocurrency company - a suit filed by the SEC in 2020. On the flip side, LBRY, acclaimed for its blockchain-based file-sharing and payment operations, declared it was shutting down alone due to a singular private debtor and millions in SEC related debts.
LBRY shares an association with the developers of Odysee, an open-source program for video-sharing that employed their network and was considered an alternative to prominent platforms like YouTube. LBRY faced a similar lawsuit as Ripple from the SEC in March 2021, which accused both of securities law infractions. Even when the SEC softened its demand for a $22 million penalty to almost $111,000, LBRY still chose not to fight the SEC.
Notorious XRP advocate, Ashley Prosper, lamented on X (Earlier known as Twitter) about the impact the SEC has already had on cryptocurrencies. He hoped that LBRY's app and legacy token could make a comeback considering the growing censorship on X and ongoing censorship on YouTube.
Blockchain enthusiast Slorg shared how amidst celebration of Ripple's victory, the less fortunate ending of LBRY, a successful Web3 company that once had actual users, escaped notice. Slorg pointed out how that platform was regulated out of existence.
Several social media users contrasted Ripple's case with that of LBRY's, citing variation in their capitals. XRP is the fifth-largest cryptocurrency boasting a $27 billion market capitalization, while LBRY credits carry a market cap of merely about $5.5 million presently. Accordingly, one X commenter contended that Ripple could have met LBRY's fate, had it not had the resources to challenge the SEC.
John Deaton, a pro-Ripple lawyer, expressed that the LBRY case is a glaring instance highlighting the SEC's overreach consequences. He lambasted the SEC for targeting a smaller American firm with no proven fraud, while failing to halt significant failures like FTX.
Yet, Ripple's legal conflict with the SEC does not end with this triumph, say industry observers. According to Fox News journalist Eleanor Terrett, there is anticipation of further litigation concerning an appropriate penalty for Ripple's institutional sales amounting to more than $700 million. The SEC, she predicts, will endeavour for a large amount for bragging rights.
In the October 19th document, the SEC stated that both Ripple and SEC would delve into discussions regarding its Section 5 breaches relating to its institutional sales of XRP. The SEC sought to suggest a timeline for further litigation until November 9, 2023.
Published At
10/20/2023 10:40:35 AM
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