LBRY credits (LBC) rallied hard this week amid reports of a favorable court case. But traders began giving back their gains Wednesday as their initial euphoria gave way to the more muted reality of a ruling that hasn’t even happened yet.
LBC was down nearly 4% in the past 24 hours – and more than 16% in the last four – around 5 p.m. ET Wednesday, capping a rally that nearly doubled the price of the LBRY content-hosting blockchain’s native token since Monday, according to data site Sigdev.
Monday was when traders began clinging to speculation that the judge overseeing the U.S. Securities and Exchange Commission’s (SEC) lawsuit against crypto startup LBRY Inc. had ruled the token was not a security – seemingly undercutting the SEC’s November victory in the case.
But that verdict still stands. On Nov. 7, Judge Paul J. Barbadoro ruled that LBRY Inc. offered LBC as securities when it sold them in 2016 – a violation of federal law. LBRY Inc. is shutting down because of the ruling, though its blockchain for hosting decentralized content lives on. As does LBC, the utility token for the LBRY blockchain’s network of content creators and consumers.
In a followup hearing on Jan. 30, Judge Barbadoro said he would clarify that his summary judgment did not apply to secondary transactions of LBC, according to crypto lawyer John Deaton, who was in attendance to argue for the clarification. Judge Barbadoro further said he was disinclined to sign a permanent injunction against the sale of LBC, Deaton said.
The judge has not yet issued any statement codifying his intentions and a transcript of the hearing was not available at press time.
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