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Highlights
- Better Markets has filed an Amicus Brief to support the US SEC in its case against Ripple
- Per the Amicus Brief, the sales of XRP constitutes securities
- Better Markets brief comes at a time many sued for a closure of the case
Non-profit, financial markets-based organization Better Markets has filed an Amicus brief in support of the United States Securities and Exchange Commission (SEC) in its ongoing lawsuit with Ripple Labs Inc. Per the filing; the company shared three unique arguments to back its claims that XRP sold the blockchain payments firm satisfies the Howey test.
The Better Markets Argument in Ripple Lawsuit
According to the filing, the sales of XRP to retail traders fulfill the third prong of the Howey Test. Better Markets emphasized that “investors’ acquisition of those securities on trading platforms does not alter their character as such.”
It believes the ruling from the district court found no support in the statutory definitions of security. Better Markets argued that the prior ruling favoring Ripple in the lawsuit “conflicts with the Supreme Court’s definition of an investment contract in Howey.”
This Amicus Brief from Better Markets came about a week after Gary Gensler appealed the ruling, challenging the retail sales of XRP. Better Markets argues that the district court ruling conflicts with others that have addressed similar issues.
Better Markets also believes “the district court ignored the economic realities surrounding the offer and sale of Ripple’s XRP token and the ability of investors to comprehend the link between Ripple’s efforts and the promise of profit.”
It advised the court to reverse the ruling that XRP sold on exchanges to retail traders and not investment contracts.
Ripple Versus SEC: Is a Settlement Ahead?
Administrations have changed at the US SEC, with the White House naming Paul Uyeda as acting Chair. As a pro-crypto regulator, Uyeda will likely take a complete pivot away from Gary Gensler’s enforcement style.
Notably, under the new leadership, many have postulated that a settlement is likely ahead. While an earlier settlement saw the judge mandating Ripple Labs to pay $125 million for selling XRP to institutional investors, experts believe a more comprehensive one is ahead.
As reported earlier by Coingape, pro-crypto lawyer Marc Fagel said any settlement is weeks away. He argued that such a settlement would likely be brokered when confirmed by the nominated SEC Chair, Paul Atkins.
Beyond Ripple Labs
Following the inauguration of President Donald Trump, many believe the war on crypto by regulators is ending. Earlier reports suggest that the regulator may drop a non-fraud lawsuit in a bid to start on a clean slate.
If this happens, other firms with pending cases against the market regulator, like Binance and Coinbase, may also see their lawsuits settled or dismissed. Acting Chair Uyeda has set up a crypto regulatory task force to drive the initiative as a sign of goodwill.
Commissioner Hester Peirce will head this task force, a move many in the industry have commended.
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