Better Markets, a nonprofit organization that advocates for the financial security of Americans, has filed an amicus brief in support of the U.S. Securities and Exchange Commission (SEC) in its ongoing appeal against Ripple Labs. The brief was submitted to the U.S. Court of Appeals for the Second Circuit on January 22, 2025. Better Markets argues that the district court’s recent ruling, which favored Ripple, was flawed, particularly regarding the sale of XRP through digital exchanges.
In the brief, Better Markets lays out several key arguments to support the SEC’s position. The nonprofit maintains that XRP should be classified as a security under U.S. law. They argue that the manner in which XRP is purchased on digital platforms does not change its nature as a security. Specifically, Better Markets contends that the purchase of XRP on exchanges fulfills the third prong of the Howey Test, which requires an expectation of profit derived from the efforts of others. According to Better Markets, investors buying XRP on these platforms are indeed relying on Ripple’s efforts to generate profits.
Furthermore, the organization takes issue with Judge Analisa Torres’ ruling, claiming that it contradicts established precedent, including the Supreme Court’s Howey decision. They suggest that the district court overlooked the broader economic context of XRP’s sale and failed to recognize the connection between Ripple’s efforts and the expectations of investors. Better Markets also argues that the court did not adequately assess the impact of its ruling on retail investors, who could be left exposed to risks if cryptocurrencies like XRP are not properly regulated as securities.
Better Markets has been an outspoken advocate for the SEC’s position in the Ripple case. Last year, the group’s CEO, Dennis Kelleher, suggested that the SEC stood a strong chance of winning the appeal, giving it a 90% likelihood. This latest amicus brief reaffirms their support for the SEC and underscores the significance they place on regulating the cryptocurrency market to protect retail investors and maintain market integrity.
Ripple supporters, however, have criticized Better Markets’ position. Jeremy Hogan, a legal expert and pro-XRP advocate, took to social media to refute Better Markets’ interpretation of the district court’s decision. Hogan pointed out that Judge Torres ruled that Ripple’s programmatic sales were conducted via blind bid/ask transactions. This means that investors purchasing XRP on exchanges were unaware of whether they were buying from Ripple or other sellers, which was a key reason the court sided with Ripple on the issue of programmatic sales.
Hogan also criticized Better Markets for failing to engage with the district court’s reasoning and instead focusing on an overgeneralized critique of the ruling. He argued that the brief’s arguments ignored the specific legal reasoning that led to Ripple’s success in the case so far.
As the legal battle continues, Ripple is expected to file its response to the SEC’s opening brief, which was submitted on January 15, 2025. Legal analysts, including Hogan, speculate that the Second Circuit may delay a final ruling, and some suggest that the new SEC leadership, under acting chair Mark Uyeda, may eventually choose to settle the case rather than pursue it further. Recently, there has been speculation that the SEC is considering a settlement, with the agency scheduling a closed meeting to discuss potential resolutions to ongoing litigation, including this case.
The outcome of the appeal could significantly influence the future regulatory landscape for XRP and other cryptocurrencies, with the potential to reshape how digital assets are classified under U.S. law. The case continues to attract widespread attention, as it could have far-reaching implications for the entire cryptocurrency market.
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