July 21, 2024
Community Response to SEC Dropping XRP Case and LBRY Shutdown
Latest Cryptocurrency News

Community Response to SEC Dropping XRP Case and LBRY Shutdown

Ripple achieved a significant legal triumph as the U.S. Securities and Exchange Commission (SEC) disclosed its intention to dismiss all claims against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen on October 19. This marked a pivotal moment in Ripple’s ongoing legal battle with the SEC, which began in late 2020.

On the same day, LBRY, a notable blockchain file-sharing and payment network, announced the cessation of its operations due to substantial debts, including owing several million dollars to the SEC, its legal team, and a private debtor. LBRY is best known for developing Odysee, an open-source video-sharing website intended to provide a decentralized alternative to major video platforms like YouTube.

The SEC initiated a lawsuit against LBRY in March 2021, alleging securities law violations similar to those in the Ripple case. Despite the SEC reducing the penalty against LBRY from an initial $22 million to approximately $111,000, the company chose to halt its appeal against the SEC.

While the crypto community celebrated Ripple’s legal success, concerns were raised about the SEC’s impact on the cryptocurrency industry. Many expressed hope for the revival of the LBRY app and its native token, considering the ongoing issues of censorship on social media platforms and YouTube.

Significant distinctions were drawn between Ripple and LBRY, particularly regarding their capitalization. Ripple, with a market capitalization of $27 billion, ranks as the fifth-largest cryptocurrency, whereas LBRY credits had a market cap of approximately $5.5 million at the time of reporting.

Community members pointed out that Ripple’s substantial financial resources allowed it to challenge the SEC effectively, underscoring the disparities in legal battles between well-funded entities and others.

Pro-XRP lawyer John Deaton criticized the SEC for targeting a small American company without proven fraud while failing to address more significant issues in the cryptocurrency space, like those related to FTX. He argued that the SEC’s actions resulted in a relatively minor $130,000 fine after incurring substantial expenses, implying the agency’s ineffectiveness.

Despite the legal victory for Ripple’s executives, the battle with the SEC is far from over, with expectations of further litigation during the penalty phase to determine the appropriate sanctions for Ripple’s substantial institutional sales, which exceeded $700 million. The SEC is anticipated to push for a substantial penalty in this ongoing legal process.

Image by Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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