The U.S. regulator said the offering of LBRY, whose business focuses on distribution and monetization of digital content without an intermediary, constituted an offering of securities under Howey test.
The charges are the latest in an ongoing regulatory crackdown on token sales during the "ICO craze" of the past few years.
The Token Taxonomy Act would also exempt swaps between digital currencies from taxation as well as change the tax structure for digital currencies in an individual retirement account.
MoneyGram partnered with Ripple in 2019 to use the service as part of its transfer solutions, but has since suspended XRP as remittance currency in February due to Ripple’s legal woes.
In a move that echoes the approach of CEO Brad Garlinghouse, also implicated in the court action, Chris Larsen’s representatives set out four arguments for dismissal in a letter to the court.
Da Vinci Capital reportedly sent a letter before claim to the CEO of Telegram, Pavel Durov, suggesting the fund would raise legal action against Telegram and TON Inc. over the project.
The action centers on claims that MoneyGram did not confirm the status of XRP as a security, which constitutes a breach of the rules around issuing and selling securities.
The SEC risk alert notes the digital assets that qualify as securities present unique challenges and risks which firms must consider when designing their compliance program.
In a letter to the judge in the case, both Ripple and the U.S. Securities and Exchange Commission said they “do not believe there is a prospect for settlement at this time.”
The Swiss blockchain technology company is being sued under U.S. securities laws, with investors arguing that the U.S. rules should still apply to the firm’s unregistered digital tokens.
The U.S. District Court in California has rejected AML Bitcoin’s attempt to have the Securities and Exchange Commission's (SEC) case against it thrown out.