Patrick Daugherty Comments on LBRY Token Ruling

10 November 2022 Bloomberg Law News

Foley & Lardner LLP Partner Pat Daugherty is quoted in the Bloomberg Law article, “LBRY Token Ruling Gives SEC Ammunition in Crypto Enforcement,” discussing a federal judge’s recent decision that ruled the sale of LBRY Inc.’s digital tokens violated U.S. securities law, as they were unregistered with the U.S. Securities and Exchange Commission (SEC).

While this case could provide some insight into what kind of tokens the SEC might consider securities going forward, Daugherty noted that “it would appear to be irrelevant to highly decentralized protocols” where “there is no central person or group upon which token purchasers rely to generate profits.”

“Highly decentralized protocols and tokens, Bitcoin being the leading example, are not securities,” he added.

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