The Ripple<\/a> versus the SEC<\/a> case has been the talk of the town for quite some time now. The crypto community was focused on it to see how a case pertaining to alleged cryptocurrency offerings being a security \u2013 would fare in court. But a lesser-known case might just provide clarity first \u2013 the SEC\u2019s suit against LBRY<\/a> scheduled for trial in September 2022.<\/p>\n In 2021, the SEC filed a complaint against LBRY, Inc. where the SEC alleged<\/a> that LBRY violated the Securities Act of 1933. The \u201caccused\u201d offered unregistered securities when it sold \u201cLBRY Credits\u201d to numerous investors. Including investors based in the United States, without registering with the SEC.\u00a0As alleged, LBRY received more than $11 million in U.S dollars, Bitcoin, and services from purchasers in its offering.<\/p>\n In its answer<\/a>, last year, LBRY pushed back on the agency\u2019s claims and asserted several affirmative defenses including a selective enforcement defense and violation of equal protection under the Fifth Amendment accusation.\u00a0Further, it grants, not sells LBC tokens, to third-parties in furtherance of the Foundation\u2019s goals.<\/p>\n Now, LBRY has filed<\/a> its \u2018Reply Memorandum\u2019 in further support of its motion for Summary Judgment as highlighted by James Filan<\/a>, a famed attorney in a June 11 tweet.<\/p>\n #XRPCommunity<\/a> #SECGov<\/a> v. #Ripple<\/a> #LBRY<\/a> In the LBRY case, LBRY has filed its Reply Memorandum in Further Support of its Motion for Summary Judgment. https:\/\/t.co\/XiazjF7Tfp<\/a><\/p>\n \u2014 James K. Filan 🇺🇸🇮🇪101k+ (beware of imposters) (@FilanLaw) June 11, 2022<\/a><\/p>\n<\/blockquote>\n In an argument, Defendant claimed that the economic realities \u201care Indisputably distinguishable from the sales at issue in Commission\u2019s Prior Section 5 cases<\/a>.\u201d Further added:<\/p>\n \u201cIgnoring\u00a0the\u00a0substance\u00a0of\u00a0LBRY\u2019s\u00a0brief,\u00a0the\u00a0Commission characterizes LBRY\u2019s argument as a \u201cformalistic approach\u201d that\u00a0 looks\u00a0 only\u00a0 to\u00a0whether \u201cthe defendant conducted an ICO and issued a white paper.\u201d<\/p>\n<\/blockquote>\n But\u00a0LBRY never suggested this narrative. \u2018The non-existence of\u00a0an ICO necessarily\u00a0meant that\u00a0a particular sale of\u00a0a\u00a0digital\u00a0asset\u2019 cannot\u00a0constitute\u00a0an\u00a0investment\u00a0contract.\u00a0\u00a0Rather,\u00a0LBRY\u00a0 distinguishes\u00a0its\u00a0sales of\u00a0LBC\u00a0from\u00a0the\u00a0sales\u00a0at\u00a0issue\u00a0in\u00a0prior Section\u00a05\u00a0cases<\/a>.<\/p>\n Contrary to Plaintiff\u2019s \u2018minimal utility value\u2019 statement, the filing asserted a different scenario. The evidence and sworn \u00a0declarations submitted by LBRY demonstrated that >1000 people used LBC\u00a0to transact\u00a0on\u00a0the\u00a0LBRY\u00a0Network daily. An attribute that the Commission (Plaintiff) couldn\u2019t dispute for utility purposes.<\/p>\n The LBRY court recently denied a request by the SEC to extend the trial date by about a month. This means that, unless there are additional scheduling changes, the LBRY case will be decided before the SEC\u2019s lawsuit against Ripple Labs for failing to register their offer and sale of XRP.<\/p>\n This is significant because the court\u2019s findings in the LBRY case could be cited in the Ripple case. In fact, the SEC tried to include<\/a> a ruling in the LBRY case as precedent against Ripple Labs in the Ripple\u00a0case.<\/p>\n<\/p><\/div>\nDouble Trouble<\/strong><\/h3>\n
\n
\n
Implications?<\/strong><\/h3>\n