Ripple’s court win disputed as SEC gains support from Better Markets non-profit

The long-running legal tussle between Ripple and the US Securities and Exchange Commission (SEC) got another twist. A non-profit, Better Markets filed an amicus brief urging the Second Circuit to overturn the 2023 Ripple case ruling. It claims that the decision announced then misapplied the Howey Test.

The lawsuit comes as Ripple and its native crypto (XRP) are rejoicing in the greens after bagging a partial win. The US District Judge Analisa Torres found that XRP was only a “security” when it was sold to institutional investors.

Recent positive developments have led XRP to gain more than 490% in the past 90 days. However, this fresh filing could hamper its momentum going forward.

Ripple’s XRP retail sales ruling under fire

As per the filing, Better Markets has filed an amicus brief supporting the SEC’s appeal against Ripple. It claims that the 2023 decision misapplied the Howey Test, weakened investor protections, and created loopholes for crypto sales. The brief argues that retail sales on exchanges still qualify as securities. It even highlighted that the court decision could possibly create a gap as it leaves retail investors vulnerable while shielding institutional players.

Better Markets has criticized Ripple’s promotional efforts, stating that the blockchain firm created expectations of profit tied to its actions. This has been seen as one of the core Howey Test criteria. It suggests that the SEC will lose its ability to protect the two classes of investors without jurisdiction over these types of securities.

It added that harm posed by the court’s decision might extend beyond the realm of crypto. This can happen as many investment contracts based on other types of assets stand a chance to evade securities regulation.

Pro-crypto attorney slams the amicus brief

Jeremy Hogan, a pro-crypto attorney, stated that the amicus brief was hard to read as it completely missed what the trial judge had ruled. He mentioned that the judge did not rule that the XRP sales on exchanges were not sales of securities because they didn’t buy directly from Ripple. However, it was ruled that the “Programmatic Sales were blind bid/ask transactions.”

He added that Ripple won because the programmatic buyers could not have known if their payments of money went to Ripple or any other seller of XRP. Therefore, it could not have been relying on the seller to increase the price. The attorney pointed out that the brief doesn’t tackle the main issue and argues that the result is not right.

"Better Market's" Amicus Brief was hard to read. Not because I don't think this case will ever be ruled on by the appellate court, but because it COMPLETELY misses (or misconstrues?) what the Trial Judge ruled (see excerpt below).

The Trial Judge did NOT rule that sales of XRP… https://t.co/XCjKXYuwQo pic.twitter.com/cjpiCSkvHj

— Jeremy Hogan (@attorneyjeremy1) January 22, 2025

Apart from the legal tussle, XRP is riding a wave after gaining over 115% in just 60 days. This surge comes after Gary Gensler stepped down from his SEC chair role.

XRP price blasted from trading around the $0.50 zone in November 2024 to hit the recent high of $3.2. XRP is trading at an average price of $3.09 as of press time. Its 24-hour trading volume is up by 12% to stand at $8.58 billion.

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