Eleanor Terrett, a Fox Business correspondent, has stated that if the judge rules that secondary market transactions of LBC by people unaffiliated with or without investment intent in LBRY are legal, it may set a precedent that is favorable to XRP users.
After this update, it appears as if the scales have shifted in favor of Ripple in the Ripple vs XRP lawsuit. There is a new update on this lawsuit and things are not looking good for the SEC.
Does Ripple have an advantage over the SEC?
Attorney John Deaton stated that US SEC lawyers and staff have been discussing the tokens as securities. While Bitcoin (BTC) was previously packaged, marketed, offered, and sold as an investment contract.
This, however, is referred to as Security. It is crucial to remember that just because someone used BTC as a security doesn’t mean that Bitcoin itself has become a security. According to the attorney, the logic remains the same in the XRP lawsuit.
The primary distinction between security and utility tokens is the purpose for which they are issued. If the coins were issued primarily to raise funds for something, they are security tokens. And it makes no difference whether tokens can be used to pay for goods and services on the platform.
Is the Judge likely to Rule in Favor of Ripple?
If the Judge believed that the token itself was a security, the statement would include subsequent sales of the token, according to the attorney. The Judge, however, stated that his decision does not apply to any subsequent sale of LBC tokens.
This turns out to be the most important reason why the Court’s clarification was desperately needed by crypto holders. However, a promoter’s direct sales of a token can still result in a commission. Meanwhile, in an investment contract case, the underlying asset is never the security.
The recent development, according to Amicus Curiae in the XRP lawsuit, gives him confidence that the Judge will deny the SEC’s Summary Judgment motion.
The Final Ruling is Near
For the longest time now, it appears like Ripple has had an upper hand in this lawsuit. The case is now in its concluding stage and its outcome would be very crucial for the entire crypto community. Ripple is working to make sure that, as of a certain date, or at least in the future, none of the XRP sales will be considered securities.
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Qadir AK
Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
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Qadir AK