John Deaton Files Notice to Serve as Amicus Curiae in LBRY Court Case
Amicus Curiae, John Deaton, the attorney representing XRP token holders in their legal battle against the Securities and Exchange Commission (SEC), has officially filed a notice to serve as Amicus Curiae in the LBRY court case. This filing was made on September 13, followed by an official submission to the United States Court of Appeals for the First Circuit on September 14.
What is an Amicus Curiae?
The term „Amicus Curiae“ is derived from Latin, meaning „friend of the court.“ An Amicus Curiae refers to an individual or group who is not directly involved in a lawsuit but provides information, expertise, or a brief to assist the court in making a decision.
LBRY’s Appeal Against SEC’s Final Judgment
LBRY recently filed an appeal notice to the United States Court of Appeals for the First Circuit, seeking to challenge the final judgment issued on July 11. The judgment mandated LBRY to pay a civil penalty and prohibited the company from engaging in unregistered offerings of cryptocurrency securities.
Background of LBRY’s Legal Battle
In March 2021, the SEC filed a lawsuit against LBRY accusing the company of unlawfully selling LBC tokens without registering with the agency. In November 2022, the SEC further charged LBRY with violating securities laws by selling their native LBC tokens without a license. The SEC classified LBC as an unregistered security based on the Howey test.
As a result, the New Hampshire District Court ordered LBRY to pay a $22 million penalty. LBRY contested this penalty, arguing that it did not account for legitimate software development and hosting expenses. However, LBRY lost the legal battle in July 2023.
LBRY’s Plan to Wind Down Operations
In response to the legal defeat, LBRY announced its intention to gradually wind down its operations. Following this decision, the company was ordered to pay a reduced penalty of $111,614 instead of the initial $22 million. Additionally, LBRY was prohibited from engaging in activities involving securities law violations or unregistered offerings of crypto securities in the future.
Ripple’s Legal Victory and Implications for LBRY
The recent legal victory by Ripple Labs against the SEC has generated optimism for a positive outcome in LBRY’s appeal. On July 14, 2023, U.S. District Judge Analisa Torres issued a summary judgment in Ripple’s favor, determining that the sale of XRP tokens to retail buyers did not constitute securities.
The LBRY case is seen as having potential implications for the ongoing XRP lawsuit. Both cases involve similar SEC allegations regarding the sale of tokens without proper registration.
John Deaton’s Active Participation
John Deaton, known for his active involvement in cryptocurrency litigation, has demonstrated his commitment to fighting for the interests of cryptocurrency investors. He submitted a Notice of Appearance representing Amicus Curiae Naomi Brockwell, the founder of Crypto Law.
Deaton and Brockwell are the co-founders of Crypto Law, a platform dedicated to providing insights and updates on the legal and regulatory aspects of cryptocurrencies in the United States.
Frequently Asked Questions
What is the LBRY court case?
The LBRY court case refers to the legal battle between the Securities and Exchange Commission (SEC) and LBRY, a company accused of unlawfully selling LBC tokens without registering with the SEC.
What is the role of an Amicus Curiae?
An Amicus Curiae is an individual or group who is not directly involved in a lawsuit but provides information, expertise, or a brief to assist the court in making a decision.
How did LBRY lose the legal battle?
LBRY lost the legal battle after the New Hampshire District Court ordered the company to pay a $22 million penalty for violating securities laws. LBRY contested this penalty but was unsuccessful in overturning the judgment.
What is the significance of Ripple’s legal victory?
Ripple’s legal victory against the SEC, where the court determined that the sale of XRP tokens did not constitute securities, has generated optimism for a positive outcome in LBRY’s appeal. The two cases share similarities in terms of SEC allegations regarding the sale of tokens without proper registration.
