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A much-anticipated judgment on the status of cryptocurrency secondary sales has left the world of crypto traders in suspense. This case, involving LBRY Credits (LBC), was presented before Judge Paul Barbadoro of the District Court for the District of New Hampshire, with the U.S. Securities and Exchange Commission (SEC) challenging the decentralized platform LBRY.
Judge Barbadoro's decision, which might have set a precedent for the impending SEC's case against Ripple, was anything but clear. The judge's declaration refrained from determining whether the requirement for registration applies to secondary offerings of LBC, an area where investors trade securities, differing from the primary market, where securities are acquired directly from the issuer.
The development unfolds amidst keen anticipation from numerous XRP tokenholders, represented by U.S. lawyer John Deaton. Their hope was that the judge's ruling would elucidate whether LBC should be considered a security. However, the judge chose to remain within the confines of "judicial restraint."
Judge Barbadoro's recent decision marks a departure from his stance during an appeal hearing in January, persuaded by Deaton, where he concluded that secondary sales of LBC were not securities offerings. He further clarified that LBC would only qualify as a security in direct sales situations.
Interestingly, the SEC also conceded that secondary market sales of LBC do not represent securities offerings. A settlement was reached for $22 million following the SEC's summary judgment victory in November 2022. However, citing LBRY's dwindling funds and near-closure status, the SEC proposed a reduced fine of $111,000 in May.
The ruling left ripple effects in its wake, especially on the imminent decision by Judge Analisa Torres on the SEC's case against Ripple. Jeremy Hogan, a U.S.-based attorney and Ripple supporter, expressed his views to Cointelegraph, indicating that a decision might be expected within a few months.
As the crypto world waits with bated breath, only time will reveal the full impact of Judge Barbadoro's ruling.
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