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Mati Greenspan, founder of Quantum Economics, has raised concerns about the potential impact of the SEC’s lawsuit against LBRY on the cryptocurrency market.
Mati Greenspan, creator of Quantum Economics, has cautioned that the SEC’s new move against decentralised content platform LBRY might jeopardise the future of all cryptocurrencies.
According to the SEC lawsuit lodged on March 29, LBRY is accused of offering and selling millions of dollars of unregistered securities via LBRY Credit tokens since 2016. The corporation has refuted the SEC’s allegations, claiming that their tokens are utility-focused rather than speculative.
In today’s newsletter, ominous titled “Don’t let them kill crypto,” Greenspan asserts that if the SEC’s lawsuit against LBRY is successful, it will have dramatic consequences:
“Should the court side against LBRY, it would literally put the future of all cryptocurrencies, including Bitcoin and Ether, in question.”
Greenspan notes that the U.S has fallen far behind on crypto regulation and warns this case could set a precedent of classifying “multifaceted programmable money” as securities.
“Judges generally take their guidance from previous rulings on similar cases, so a negative ruling here could make it easier for them to kill off any project which utilizes crypto tokens. DeFi, non-fungible tokens (NFTs), smart contracts, and just about everything except possibly stablecoins.”
Greenspan argues the platform’s sole wrongdoing was establishing itself in the United States, and he told Cointelegraph that the case exemplifies the United States’ “backwards approach to forward-thinking creativity.”
While the Israeli commentator does not believe an SEC win will stifle competition in the crypto industry as a whole, he believes it would in the United States:
“It will simply drive it out of the United States. Projects like this are flourishing in Europe and some parts of Asia and the technology continues to progress globally. America is being left behind.”
LBRY has contested the SEC case, arguing that while the “SEC claims that Credits have no use other than speculation,” the Credits actually allow users to tip, publish, purchase and boost content on the platform, and the company “at no time indicated that LBRY Credits were an investment, and consistently discouraged purchasing Credits for this purpose.”
Greenspan has urged readers of his newsletter to either write a letter to congress to show support of LBRY, or visit helplbrysavecrypto.com. to get more educated about the “idiotic actions of American regulators.”
Despite sounding alarm bells over a negative outcome of this case, Greenspan told Cointelegraph he is optimistic:
“Hopefully, the judge will be able to see the blatant holes in the SEC’s case. LBRY seems to have some very sound arguments so I’m quite optimistic.”