Ripple, the blockchain company currently facing a lawsuit from the United States Securities and Exchange Commission (SEC), may have to wait a little longer for a decisive ruling.
A district court judge in the U.S., Paul Barbadoro, declined to determine whether the secondary sale of LBRY Credits (LBC) qualifies as a security.
On July 11, Judge Barbadoro made his decision in a case brought by the SEC against LBRY, a decentralized content platform.
This ruling could establish legal precedent for Judge Analisa Torres, who will preside over the SEC’s case against Ripple in the coming months.
READ MORE: Bitcoin Attempts Fresh Breakout as Battle for Yearly Highs Intensifies
In his ruling, Barbadoro abstained from taking a position on whether the registration requirement applies to secondary market offerings of LBC.
The secondary market involves trading securities between traders, while the primary market entails direct trading from the issuing company.
John Deaton, a U.S. lawyer representing numerous XRP tokenholders, sought clarification from Barbadoro regarding LBC’s classification as a security.
However, the judge upheld his “judicial restraint” and refrained from providing a definitive answer.
This recent opinion from Barbadoro represents a reversal from his stance during a January appeal hearing, where Deaton successfully argued that the secondary sale of LBC should not be considered a securities offering.
During the appeal hearing, the New Hampshire judge clarified that LBC only qualifies as a security when sold directly.
The SEC also acknowledged that secondary market sales of LBC do not fall under the definition of a security.
Although the SEC obtained a summary judgment in November 2022, it opted to settle for $22 million during the appeal hearing in January.
In May, the SEC revised the amount and requested a reduced fine of $111,000 due to LBRY’s financial struggles.
In the meantime, Jeremy Hogan, a U.S.-based attorney and advocate for Ripple, shared with Cointelegraph that Judge Analisa Torres is expected to deliver her ruling within the next few months.
Hogan anticipates that the broader outcome will be known before the year’s end, unless Ripple achieves a complete victory.
If the details of the ruling are unfavorable, appeals are likely to prolong the legal process.
However, Hogan reassured typical XRP holders that the final outcome would not significantly affect them.
