Better Markets has filed an amicus brief supporting the SEC's appeal against Ripple Labs, aiming to overturn a 2023 ruling that exempted Ripple’s XRP sales to retail investors from U.S. securities laws. The organization claims the district court misapplied the Howey Test, which could undermine investor protections and create loopholes for digital asset sales. The brief argues that XRP sales on exchanges still qualify as securities, emphasizing that investors' expectations of profits were tied to Ripple’s promotional efforts. Better Markets cautions that the ruling favors institutional investors over retail investors, which poses risks for the latter. The SEC's initial lawsuit against Ripple was filed in December 2020, accusing the company of raising over $1.3 billion through unregistered sales. While a district court previously ruled in favor of Ripple regarding retail sales, it later found Ripple liable for $125 million for sales to institutional investors. The outcome of this case could significantly impact the classification of digital assets under securities laws and is seen as critical for the future of cryptocurrency regulation.

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