LBRY Judge Rules on The status of Secondary Crypto Sales, Bad Signal for Ripple?

A few months back, Pro-XRP lawyer John Deaton persuaded the ruling judge that secondary crypto LBC coin sales don't constitute a security offering.

In a recent development, the lawyer reached out to the judge to clarify the status of the secondary sale of a crypto asset, but he remained conservative about it.

The secondary market is where traders and investors buy and sell securities, while the primary market is where traders buy and sell from companies issuing securities directly.However, Barbadoro's recent view of cryptocurrencies contradicts his conclusion in a January appeal by John Deaton.

US District Judge Refuses to Rule on LBRY Credit (LBRY) SALES

On July 11, United States District Court Judge Paul Barbadoro of New Hampshire refused to rule on whether the secondary sales of LBRY Credit (LBC) tokens constitute security.

He made this ruling ina lawsuit filedthat the United States Securities and Exchanges Commission (SEC) brought against the distributed content platform LBRY.

The ruling may have provided legal precedent to Barbadoro's contemporary, district court Judge Analisa Torres, who is yet to make a ruling on the SEC's suit against Ripple Laps later in the year.

In his ruling, Barbadoro said that he doesn't take any position on whether the current registration requirements also applied to secondary market offerings of the LBC token.

This suit has attracted the attention of many crypto figures and pundits, like Pro-XRP lawyer John Deaton.In a tweet on July 11, Deaton said that he contacted Judge Barbadoro seeking clarity on whether the LBC token constituted security.

However, Barbadoro declined to do so, believing the issue wasn't litigated. Thus, the judge preferred to exercise judicial restraint," Deaton narrated.

As a result, Deaton said, I'm disappointed the judge wasn't more aggressive like he was in the November and January hearings, but he chose to be super conservative.

Judge Barbadoro's Recent Opinion on Secondary Crypto Sales

Barbadoro's recent opinion is a reverse of what he had initially concluded in Deaton's January appeal, where the lawyer had convinced him that the LBC sale doesn't constitute a security.

The Judge noted in the previous appeal hearing that the LBC token will be regarded as security only if a direct sale is made.

Furthermore, the United States Securities and Exchanges Commission (SEC) also agreed that secondary market LBC token sales don't constitute a security.

It's worth noting that the SEC won the November 2022 summary judgment, though it settled for $22 million on a January 30 appeal hearing.

However, the SEC revised the amount and rather requested that the court impose a $111,000 fine on LBRY due to LBRY's near-defunct status and lack of funds.

In the meantime, a US-based lawyer and Ripple's advocate informed the public in a tweet that Judge Analisa Torres will make her ruling in the next coming months.

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