Investing.com – Dark clouds are looming in the U.S. Securities Commission’s (SEC) lawsuit against . The authority was able to win a victory in another procedure, which should now serve as a precedent for the trial still in progress.
The SEC had sued content platform LBRY because it believed that by issuing the LBC token, it had put an unregistered security into circulation. The defense argument was that the token was not purchased as an investment, but for use within the network. However, the US District Court in New Hampshire did not accept this argument and said:
“Nothing in the case law says that a token for both consumer and speculative use cannot be sold as an investment contract…as a result, statements by a group of LBC holders that they purchased LBC for use on the LBRY blockchain are of limited relevance in determining whether LBRY offered it as a security.
Even though an unknown number of buyers may have purchased LBC in part for consumption, this does not change the fact that the objective economic realities of LBRY’s offer to LBC prove that it was offered as a stock “.
This decision may pose a problem for Ripple, as the defense also relies on the fact that XRP has a practical purpose.
Further, Ripple argues that the SEC failed in its duty to notify the company that XRP may be a security. The court also rejected a similar argument from LBRY:
“While this may be the first time this principle has been applied against a digital token issuer that has not conducted an ICO, LBRY cannot claim that it does not was not duly informed of the illegality of his conduct”.
Ripple price technical benchmarks
For Ripple, we are currently heading towards a price of $0.4383 is down -6.18 percent, while the weekly loss stands at -4.74 percent.
The 38.2% Fibo retracement support of $0.4639 and the psychological level of $0.4500 were unable to stop the downside pressure. The 50 percent Fibo retracement of $0.4352 is currently being tested and if the daily close breaks below, focus will shift to the dynamic support of the 100-day MA at $0.4131.
Only if the bulls manage to sustainably defend the 50% Fibo retracement will a rally towards the 38.2% Fibo retracement be possible.
By Marco Oehrl