In a recent development, attorney John Deaton, well-known for representing XRP token holders in their fight against the SEC, has taken an active role in the LBRY court case. On September 13, Deaton filed a notice to serve as Amicus Curiae, indicating his intention to offer information and expertise to assist the court in making a decision. This move comes in response to LBRY’s appeal notice to challenge the final judgment issued on July 11 that required LBRY to pay a civil penalty and prohibited its involvement in unregistered offerings of cryptocurrency securities.
The lawsuit against LBRY was initially filed by the US SEC in March 2021. The SEC accused LBRY of unlawfully selling LBC tokens without registering with the agency. The charges were further escalated in November 2022, with the SEC alleging that LBRY violated securities laws by selling LBC tokens without a license. The SEC categorized LBC as an unregistered security based on the Howey test. In July 2023, the New Hampshire District Court ruled in favor of the SEC, mandating LBRY to pay a $22 million penalty. Despite LBRY’s contention that the penalty did not consider legitimate software development and hosting expenses, the court’s decision remained unchanged.
Following LBRY’s unfavorable ruling, the company announced plans to gradually wind down its operations. In July, LBRY’s penalty was reduced to $111,614 instead of the original $22 million. Additionally, LBRY was immediately forbidden from engaging in activities involving securities law violations or unregistered offerings of crypto securities in the future. However, the recent legal victories obtained by Ripple and Grayscale against the SEC have instilled hope for a potential positive outcome on appeal.
In a landmark case, U.S. District Judge Analisa Torres issued a summary judgment in favor of Ripple, determining that the sale of XRP tokens did not constitute securities. This case, similar to LBRY’s, involved SEC allegations regarding the sale of $1.3 billion in XRP tokens. The resolution of the LBRY case bears significance for the ongoing XRP lawsuit, further fueling optimism for a favorable outcome.
John Deaton, a prominent attorney advocating for the rights of cryptocurrency investors, has been actively involved in legal battles concerning cryptocurrency regulations and legal actions. Deaton submitted a Notice of Appearance as Amicus Curiae, representing Naomi Brockwell, the founder of Crypto Law. Together, Deaton and Brockwell co-founded Crypto Law, a platform dedicated to providing insights and updates on the legal and regulatory aspects of cryptocurrencies in the United States.
Through social media, Deaton expressed his unwavering commitment to the LBRY case, stating that they would fight relentlessly regardless of the outcome. His involvement in the LBRY case signifies his dedication to seeking justice for cryptocurrency-related legal battles and supporting those affected by the SEC’s actions.
LBRY’s decision to appeal the SEC’s ruling stems from a belief in the injustice and inaccuracy of the decision. The company perceives the SEC’s intentions as an attempt to harm the cryptocurrency industry on a broader scale. LBRY aims to challenge the SEC’s ruling, emphasizing the importance of maintaining a fair and thriving cryptocurrency ecosystem.
The outcome of LBRY’s appeal holds potential implications for the broader cryptocurrency landscape. If successful, LBRY’s appeal could set a precedent and establish clearer guidelines for other cryptocurrency projects facing similar legal battles. This outcome would undoubtedly impact the ongoing XRP lawsuit and other cases involving the SEC’s classification of cryptocurrencies as securities.
The ongoing legal battle between LBRY and the SEC has garnered significant attention within the cryptocurrency community. Attorney John Deaton’s involvement as Amicus Curiae in the LBRY case highlights the dedication and commitment necessary to protect the rights and interests of cryptocurrency investors. With the appeal underway, LBRY’s fight against the SEC’s ruling carries implications for the entire cryptocurrency industry and sets the stage for potential legal precedents in the future.