(Photo from Unplash)

This week has been eventful in the Crypto space and it is just Tuesday! FTX bank-run is unfolding after the Twitter altercations between CZ, CEO of Binance and SBF of FTX. Then, in a masterstroke CZ came forward and declared that Binance will acquire FTX pending due diligence. A full write that of how the events between Binance/FTX unfolded will follow in my next article.

At the same time, another landmark event took place, that many might have not noticed amid the general market crash. 

LBRY, the video publishing platform lost its case against the SEC for being an unregistered security. The court case had been fought for around 5 years now. For many, LBRY was viewed as a small fish, without enough resources or muscle, and that is the reason why it was targeted by the SEC and lost.

The platforms announcement of the judge's decision was very laconic.

The federal judge in his decision argued that LBRY was a security as during the token sale there was no use case for the LBC token. This opens the Pandora box for other tokens or NFT projects to be labelled as securities if the SEC goes after them.

Furthermore, the court decision noted that the tokens sold were investment opportunities and that by retaining part of the LBC tokens itself LBRY signaled to potential token buyers that it would work to improve the value of its token and Blockchain. Thus, it would be profitable for buyers to hold the token.

(Excerpt from the court ruling)

The implications are wide and far ranging for the whole crypto industry. In principle, it will make it easier for SEC to label as securities pre-mined altcoins that launched their tokens through ICOs.

The court ruling might have an impact on the XRP (Ripple Labs) vs SEC litigation possibly featuring in the final decision. Ethereum could also be a target for the SEC, though I believe chances are slim. Finally, it could put an end to the pattern of launching of centralized utility tokens offered through ICOs.

Originally posted on my Hive blog.

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