SEC v. Ripple lawsuit: LBRY notes SEC contradictions in XRP and LBRY cases

LBRY, a blockchain-based file-sharing and payment network, is in the middle of a lawsuit with the Securities and Exchange Commission after being charged, in March 2021, for conducting an unregistered offering of digital asset securities.

The financial watchdog claims LBRY sold digital asset securities called “LBRY Credits” to numerous investors, including investors based in the United States, without registering with the SEC. LBRY allegedly received more than $11 million in U.S. dollars, Bitcoin, and services from purchasers who participated in its offering.

The lawsuit has garnered more attention recently as the SEC tried to include a ruling in the SEC v. LBRY as jurisprudence for the SEC v. Ripple.

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With both cases ongoing, LBRY has gone to Twitter to let people know that “the SEC just said in verbal argument in our case that they have NOT asserted that Bitcoin or Ethereum is not a security. They’re saying the Hinman speech is his personal opinion”. 

This has been a much talked about issue in the SEC v. Ripple case as the SEC spent much of the lawsuit arguing that the Hinman’s 2018 speech on Ether was his “personal opinion”, but has now decided to call it “public guidance” once Magistrate Sarah Netburn ruled it as not privileged material.

The motion for partial reconsideration and clarification of Magistrate Judge Netburn’s DPP Ruling was filed last week and a decision will be made soon.

The original ruling was very well received by Ripple and XRP Holders, who were accepted as Amicus Curiae in court. Attorney John Deaton confirmed the court order as a win and said the biggest victory wasn’t the speech draft itself but the notes from meetings with third parties not associated with Ripple.

Attorney Jeremy Hogan recently suspected that the SEC could be hiding “something really bad” and that would be the reason to do whatever it could, including contradicting itself over and over in the “personal opinion” vs “public guidance” duality, so that the documents wouldn’t fall on Ripple’s hands.

On the SEC v. LBRY contradiction, Hogan joked: “Let me read your future: In a couple of months the SEC will say that it was not really his personal opinion but the opinion of the Division of Corp Finance.”

The SEC v. LBRY judge also declined a request from the SEC to move back the trial date, which might mean the LBRY case will be decided before the SEC v. Ripple lawsuit.