XRP and SEC Lawsuit: Better Markets Criticizes Judge Torres’ Ruling

XRP and SEC Lawsuit: Better Markets Files Amicus Brief in Support of SEC

XRP and SEC Lawsuit – On January 22, 2025, Better Markets, a nonprofit organization focused on building a secure financial future for Americans, filed an amicus brief in support of the U.S. Securities and Exchange Commission (SEC) in its ongoing lawsuit against Ripple Labs. The brief was submitted to the U.S. Court of Appeals for the Second Circuit, marking a significant development in the case, which has garnered widespread attention within the crypto community.

Key Arguments from Better Markets’ Brief

Better Markets’ brief centers on three primary points of contention with the district court’s ruling in the Ripple case, specifically criticizing Judge Analisa Torres’ decision on programmatic sales of XRP. First, the organization argued that XRP should be classified as a security under the Howey Test, citing the expectation of profit from the efforts of others. Better Markets emphasized that the acquisition of XRP on trading platforms does not alter its classification as a security, highlighting the expectations of profit based on Ripple’s efforts.

Secondly, Better Markets claimed that Judge Torres’ decision conflicts with the Supreme Court’s Howey precedent and rulings in other cases, thus presenting an incorrect interpretation of securities law. The nonprofit further argued that the district court had failed to account for the economic realities surrounding the sale of XRP, as well as the link between Ripple’s actions and investor expectations.

Finally, Better Markets criticized the court’s decision for not adequately considering the potential harm to retail investors. The organization warned that without appropriate regulation, these investors remain vulnerable to the risks of unregulated crypto assets being treated as securities.

Reactions from Pro-XRP Legal Experts

Jeremy Hogan, a legal expert aligned with the XRP community, reacted critically to Better Markets’ brief. Hogan pointed out that the district court’s ruling found that XRP’s programmatic sales involved blind bid/ask transactions on digital exchanges, meaning investors had no knowledge of whether their purchases were from Ripple or other XRP holders. As a result, Hogan emphasized that the investors’ reliance on Ripple’s efforts to generate profits could not be substantiated, which formed the basis of Ripple’s victory in this aspect of the case.

Possible Settlement Discussions and Next Steps

In addition to the ongoing legal battle, speculation has arisen that the SEC might be preparing to settle with Ripple, following a closed meeting scheduled by the SEC under acting chair Mark Uyeda. This meeting, scheduled for January 23, 2025, at 2:00 p.m. ET, is expected to focus on resolving litigation claims and potential settlements, which could impact the outcome of the Ripple case.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.