The United States Securities and Exchange Commission (SEC) recently revealed that it did not designate a sale of LBRY Credits (LBC) in secondary markets as a security.
In a recent hearing on Monday, courts ruled in favour of direct sales in a case many see as a victory against the SEC’s regulatory crackdown on cryptocurrencies. Attorney John Deaton attended discussions in the appeal hearing, scoring the major win for digital assets.
He aimed to receive clarity in LBC secondary market transactions due to alleged ambiguities in the injunction launched in November last year.
At the time, courts awarded the SEC a summary judgment and labelled LBC token sales over six years’ time as investment contracts while failing to specify details about the transactions. The SEC hoped to receive backing from New Hamshire district courts in the case.
In the case, Deaton represented technology journalist Naomi Brockwell, an animus curiae of the hearing, to challenge the injunction as ambiguous and broad.
Prior cases found that courts did not acknowledge any security issues of digital assets in the United States a paper from Lewis Cohen, a commercial contractor.
Judges in the case stated told Deaton: “I’m going to make it clear that my order does not apply to secondary market sales.”
SEC-Ripple Labs Legal Row
The news comes amid further litigation against Ripple Labs in an ongoing case, sparking criticisms from the Washington, DC-based Blockchain Association.
The organisation said it would become an amicus brief for the embattled cryptocurrency firm after the latter was hit with an SEC lawsuit over alleged Ripple (XRP)-linked unregistered securities.
The Association tweeted at the time: “This case, which is just one in a long line of SEC efforts to regulate by enforcement, highlights the SEC’s efforts to cement and legitimize its overly broad interpretation of the Howey test.”
It concluded a negative ruling could have “devastating effects” on crypto markets and create laws that “significantly restrict” cryptocurrency networks.
