Attorney John Deaton records a major victory on behalf of LBRY (LBC) token holders and the entire crypto industry.
In the recently concluded hearing between LBRY and the SEC held yesterday at the Warren B. Rudman United States Courthouse in New Hampshire, attorney Deaton recorded a massive win on behalf of LBC token holders and the entire crypto industry.
Deaton, who appeared as amici counsel to tech journalist Naomi Brockwell successfully convinced the Judge to rule that LBC secondary market transactions do not constitute a security. Recall that in the SEC’s bid to avoid providing clarity for LBC, the agency requested an injunction that does not distinguish between LBRY, the company’s executives, and users.
Attorney Deaton noted that the injunction was vague and broad, prompting him to seek clarification for LBC secondary market transactions on behalf of Brockwell and other LBRY users.
The founder of Crypto Law said he referenced an article written by commercial contract lawyer Lewis Cohen, which analyzed all the security cases in the U.S. since Howey. Throughout Cohen’s analysis of security cases in the United States, no court ever mentioned that the underlying asset was a security, Deaton noted.
Explaining his remarks to the Judge in the courtroom, Deaton said:
“The article says that your decision reads like you could be saying that LBC is security in itself. Judge, if you don’t mean that, then we need to clarify [it].”
After a back-and-forth discussion, the Judge noted that he is not inclined to give an injunction, Deaton said. He further explained that the statement from the Judge is a major win as the court would not apply an injunction to LBRY users.
Interestingly, Deaton confirmed that he got the Securities and Exchange Commission to concede on the record that secondary market transactions of LBC do not constitute a security.
LBRY Hearing: The Stakes for ALL Crypto https://t.co/YPbrBkw0Od
— CryptoLaw (@CryptoLawUS) January 30, 2023
Crypto Community Praises Deaton
Several cryptocurrency enthusiasts have commended Deaton for his efforts in the LBRY case, which could also be used in other crypto-related cases, including Ripple v. SEC.
In a tweet today, attorney Jeremy Hogan, a partner at Hogan & Hogan law firm, applauded Deaton for pushing the SEC to admit on the record that LBC as a token is not a security.
First word from the SEC v. LBRY hearing:
The SEC admitted on the record that the token itself is not a security.
Good job Mr. Deaton! https://t.co/tRXIQs5SSu
— Jeremy Hogan (@attorneyjeremy1) January 30, 2023
In addition, Fox Business Journalist Eleanor Terrett also commended Deaton, saying nobody fights harder for the cryptocurrency industry like the founder of Crypto Law.
— Eleanor Terrett (@EleanorTerrett) January 30, 2023
LBRY has this to say to SEC:
Perfect For SEC.https://t.co/Zzg3WLrWhm
— TheCryptoBasic (@thecryptobasic) January 31, 2023