Better Markets, a non-profit committed to building a resilient financial system, has filed an amicus brief in the case between the U.S. Securities and Exchange Commission (SEC) and Ripple. In the brief, Better Markets criticizes U.S. District Judge Analisa Torres’ ruling, arguing that the “court ignored the economic realities surrounding the offer and sale of Ripple’s XRP token.”

The non-profit organization asserts that the court did not make a realistic or accurate appraisal of today’s investors. According to the brief, Ripple “targeted” retail investors and leveraged their “willingness to expect profits from Ripple’s efforts.”

The filing of the amicus brief comes amid a growing belief among Ripple and its supporters that the new U.S. government will end or move to settle the longstanding case. A reported meeting earlier this month between then-President-elect Donald Trump and Ripple CEO Brad Garlinghouse, along with Chief Legal Officer Stuart Alderoty, has further fueled speculation that the SEC’s four-year battle with the San Francisco-based firm is about to conclude.

However, in its Jan. 22 amicus brief, Better Markets, which claims to have filed similar briefs supporting robust regulation and enforcement to protect investors, states it has a “strong interest” in the Ripple versus SEC case. Part of this interest stems from its belief that the U.S. District Court “dramatically narrowed the definition of an investment contract” when it delivered its ruling in July 2023.

Better Markets said the flawed reasoning behind the ruling did not take into account investors’ level of sophistication. The organization warned of serious consequences if the ruling is not reversed.

“Unless this Court reverses the district court on these issues, a huge number of everyday American investors will be far more vulnerable to fraud and abuse in the rapidly expanding and extraordinarily risky market for cryptocurrency investments.That includes any investors retail or institutional who acquire crypto investments through secondary trading platforms, where a large volume of crypto security trading occurs,” Better Markets warns.

The non-profit organization warned that denying the SEC jurisdiction over crypto assets could inhibit its ability to protect investors. To remedy this, Better Markets said it wants the district court ruling, which determined that the programmatic sales of Ripple’s XRP token on secondary trading platforms are not securities under Howey, to be reversed.

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