LBRY Token Rally Stalls as Traders Move on From Court Speculation
The token has still nearly doubled in price in the past seven days.
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.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.