Ripple celebrated a legal victory as the U.S. Securities and Exchange Commission (SEC) expressed its intention to dismiss all claims against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen on October 19. This marked a significant development in the civil lawsuit the SEC had filed against Ripple in 2020. However, this triumph was overshadowed by the unfortunate news that blockchain platform LBRY was shutting down due to insurmountable financial burdens.
LBRY, a major blockchain file sharing and payments network, announced the termination of its operations on the same day, citing debts amounting to “millions of dollars” owed to the SEC, its legal team, and private debtors. LBRY is renowned for creating Odysee, an open-source video sharing platform that aims to provide a decentralized alternative to major video platforms like YouTube.
The SEC had initiated a lawsuit against LBRY in March 2021, alleging that the company had violated securities laws similar to those it had levied against Ripple. Although the SEC reduced the initial $22 million fine against LBRY to approximately $111,000, the company ultimately decided not to appeal the SEC's judgment. Notably, the LBRY platform and its native token were able to gain prominence due to concerns of censorship on platforms like Twitter and YouTube.
However, as some cryptocurrency enthusiasts pointed out, there are substantial differences in the financial scale between Ripple and LBRY. While XRP, Ripple's native cryptocurrency, holds the fifth-largest market capitalization, valued at around $27 billion, LBRY's native tokens are considerably smaller, with a market cap of approximately $5.5 million.
This development ignited discussions on social media, with many highlighting the consequences of the SEC's aggressive approach toward smaller entities in the crypto industry. It was noted that while Ripple had the financial means to challenge the SEC, smaller companies like LBRY may not have the same resources. This further emphasized the industry's need for clarity and fair regulation.
Despite the significant legal win for Ripple executives, experts argue that the legal battle with the SEC is far from over. The SEC reportedly aims to secure substantial fines from Ripple, implying that further proceedings are expected. The SEC and Ripple will negotiate violations related to institutional sales of XRP, and a timetable for future actions is set to be established by November 9, 2023.
