Ripple CTO David Schwartz and attorney John Deaton have seen some positive implications in Judge Barbadoro’s final ruling in the SEC v. LBRY case.
In a recent development, David Schwartz, the Chief Technology Officer (CTO) at Ripple, joined prominent figures within the cryptocurrency community to share their reactions to the final ruling delivered by Judge Paul Barbadoro in the SEC v. LBRY case.
Amid the efforts made by attorney John Deaton to seek clarification from Judge Barbadoro regarding the non-security status of the LBRY Credit token (LBC), the judge ultimately declined their request. According to the Judge, the topic wasn’t litigated hence the need to exercise judicial restraint.
I asked the Judge to clarify that the token itself is not the security just as Judge Castel did in Telegram. He declined to do so because he said that specific issue wasn’t litigated and he believes in exercising judicial restraint. He wrote: “it suffices to say that merely… https://t.co/xR9AemS5Hq
— John E Deaton (@JohnEDeaton1) July 11, 2023
As anticipated, members of the cryptocurrency community, including attorney Deaton, expressed disappointment in the judge’s decision to refrain from deeming the LBC token a non-security.
Ripple’s CTO Finds Silver Lining in LBRY Case Judgment
Reacting to the development, Schwartz offered a unique perspective, considering Judge Barbadoro’s final ruling as a victory for LBRY native token holders.
Schwartz believes that Judge Barbadoro’s ruling brings clarity to the situation by stating that the ordinary use of LBRY Credit (LBC) does not breach the imposed injunction. He wrote: “It’s at least a victory that it was made clear that ordinary use of the token doesn’t violate the injunction.”
Notably, the judge explicitly pointed out that the SEC did not argue that third-party holders of LBC could potentially violate the proposed injunction. Consequently, the judge concluded that users who acquire LBC tokens for consumptive purposes should not be subject to regulatory restrictions.
It's at least a victory that it was made clear that ordinary use of the token doesn't violate the injunction.
— David "JoelKatz" Schwartz (@JoelKatz) July 12, 2023
Attorney Deaton echoed Schwartz’s sentiment, particularly regarding the judge’s conclusion that users can continue utilizing the LBC token without fear of legal repercussions.
The Overall Implication
On the whole, the LBRY case continues to be closely watched by industry participants, as it holds broader significance for the classification and regulatory treatment of digital assets.
While the ruling did not definitively settle the issue of LBC’s security status, Ripple CTO and attorney Deaton find encouraging aspects that shed light on the rights of ordinary users and the potential limitations of regulatory oversight in certain circumstances.
Recall that the SEC recently filed a lawsuit against top exchanges Binance and Coinbase, alleging that several assets such as ADA, ALGO, MATIC etc are securities.
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