XRP Community Hails SEC Commissioner for Condemning LBRY Lawsuit

XRP community and Ripple Lab’s Chief Legal Officer (CLO) Stuart Alderoty took to the X to applaud Hester Peirce, an SEC Commissioner, for condemning the “injustice” meted out through the LBRY lawsuit.

Some overdue thoughts on our case against LBRY: https://t.co/wLsG4Xr7wz

— Hester Peirce (@HesterPeirce) October 27, 2023

LBRY Lawsuit: Hester Peirce Voices Concern

The SEC Commissioner released a statement of dissent on the LBRY lawsuit earlier today. Peirce highlighted that in recent times, the commission has brought several troubling enforcement actions against crypto exchanges including Ripple, LBRY, Kraken, Binance, and Coinbase. 

Amongst the numerous enforcement actions from the SEC, Peirce claimed that the LBRY lawsuit unsettled her the most but she could not speak publicly about it while the litigation was ongoing. 

In July, LBRY, branded as a blockchain-based file-sharing and payment network was found guilty of violating Section 5 of the Securities Act of 1933 and was therefore, permanently restrained and enjoined from participating directly or indirectly in any unregistered crypto asset securities offering through its native token. 

The crypto platform decided to file an appeal of the final judgment against the U.S. SEC after two months of silence. However, the firm backtracked as it appeared there was nothing more to fight for

Noteworthy, the XRP community showed huge support for the blockchain-based file-sharing and payment network in the face of litigation, especially in its initial decision to file an appeal. 

LBRY vs SEC Lawsuit Outcome Condemned

As the litigation ended in the SEC’s favor, LBRY decided to shut down its operations, citing mounting financial liabilities and pressure from the SEC as the reasons behind the closure. 

Once the company is shut down, “its assets will be placed in receivership and used to satisfy its debts, including the civil money penalty owed to the Commission,” Peirce said in her release as part of the reasons she believed the outcome was not in the interest of innovation or investors.

The sad news forced CryptoLaw founder John E. Deaton to criticize the SEC for targeting the company and subjecting it to financial depression. This is the same sentiment that Peirce shared and in her statement, she made it clear that the LBRY lawsuit has demonstrated the arbitrariness and real-life consequences of the Commission’s misguided enforcement-driven approach to crypto.

Many crypto enthusiasts including Deaton and Ripple CLO, both proponents of the XRP token, hailed her outspoken criticism. They strongly believe that filing an amicus brief against the SEC in the future might go a long way.