The post Ripple (XRP) News – John Deaton Says LBRY Counsel Missed Opportunity to Challenge the SEC on Howey Test appeared first on Coinpedia Fintech News
In a recent court ruling, LBRY (LBC) and its subsidiary Odysee were directed to cease offering unregistered securities in the form of crypto assets. The United States Securities and Exchange Commission (SEC) imposed a penalty of approximately $111,000 on LBRY. However, the decision has sparked a heated debate and raised concerns over regulatory clarity.
LBRY’s legal counsel has argued that the case was unfairly determined and is calling for a review, citing the lack of clear regulations in the crypto space. They contend that the SEC’s stance on digital assets as securities, based on the Howey test, requires further examination. Under this test, an “investment contract” is established if an investment of money is made in a common enterprise, with an expectation of profits derived from the efforts of others.
The SEC maintains its position that most digital assets should be considered securities according to the Howey test. The classification of a specific digital asset depends on the unique circumstances surrounding its offer or sale.
The ongoing legal battle between the SEC and blockchain payment giant Ripple regarding XRP sales has also been influenced by the LBRY court ruling. Ripple’s legal team has become increasingly active in discussing potential strategies and analyzing the implications of the LBRY case.
LBRY Counsel’s Missed Opportunity
Renowned crypto lawyer and founder of crypto-law.us, John E Deaton, has criticized the LBRY counsel for failing to challenge the SEC’s interpretation of the Howey test. Deaton argues that LBRY users primarily adopted the LBC token to access the platform’s services and did not view it as an investment.
As the Ripple-SEC case nears its conclusion, discussions surrounding overlooked arguments and the next steps to be taken have intensified. The outcome of this landmark case will likely have significant ramifications for the cryptocurrency industry, shaping regulatory approaches and providing important precedents.
While LBRY seeks a review of the court ruling based on regulatory uncertainty, the SEC’s position on digital assets as securities remains firm. The case serves as a reminder that navigating the evolving landscape of crypto regulations presents challenges for both regulators and market participants. The ultimate resolution of the Ripple-SEC dispute will have far-reaching implications for the industry’s future.