The New Sports Economy Institute (NSEI) filed a petition on November 10th, asking for the court to file an amicus brief in support of the United States Security and Exchange Commission (SEC) lawsuit against Ripple.
NSEI said it had worked closely with the SEC, CFTC, and Ontario Securities Commission for over a decade as an innovator in financial products. They always choose to engage regulators before engaging with end users, preferring clarity over ambiguity regarding new products.
The organization does not operate in the cryptocurrency industry; instead, its primary goal is to foster an environment where financial innovation is appreciated for how it benefits people. But only to the extent that this innovation remains transparent and serves the greater good of society, according to the filing.
NSEI attempts to assert in their proposed brief that the cryptocurrency XRP, which is indirectly linked to Ripple, is a speculative asset supported by the greater fool theory.
Furthermore, The New Sports Economy Institute claimed that:
Defendants are reading too far into the common enterprise element of the Howey test, nitpicking at every turn and misconstruing the true intent.
They assert that these details ignore the main objective of the “common enterprise” prong, which is to address the probable inability of investors to fend for themselves.
According to them, the problem is that novice investors fail to realize they are speculating when they believe they’re investing. To them, speculation means nothing more than an obscure word for ‘investment.’
Moreover, the organization believes that “this is simply an incentive problem.” Since those that utilize XRP with the intention of making purchases get value from it, they have the motive to support Ripple in this lawsuit by filing an affidavit.
The same incentives apply to XRP holders who purchased it as an investment since, if Ripple loses, the price of XRP would almost certainly decrease, making their “investments” less valuable.
They ask the Court to take into account the expectations it would set with its decision in order to resolve this dispute by looking beyond what happened at this specific intersection.
Such as a ruling on whether Ripple violated securities laws may affect current holders of XRP. On the other hand, if it is found that crypto is not “security,” then this would be seen as permission for others to invest money in it.
SEC vs. Ripple
The court case between Ripple Labs and the SEC, which has lasted for two years now, is about to come to an end. Both parties have filed a motion for summary judgment, yet it’s unclear who will win the case.
Since then, twelve different companies – including Coinbase, the Crypto Council, and Cryptillian Payment Systems – submitted an amicus curiae brief supporting Ripple in its legal battle.
Despite the SEC’s victory over one operator on a decentralized video-sharing platform LBRY Inc, Ripple’s supporters believe that the outcome of this case will have profound implications for the crypto industry.
However, to support the SEC’s motion for summary judgment, InvestReady (Accredify) has also requested the court on November 9th for permission to file an amicus brief.
InvestReady claims in its proposed brief that, in light of the current FTX tragedy, Ripple’s arguments are a house of cards that is collapsing faster than Luna’s price. Since a centralized entity marketed it, InvestReady argues that the cryptocurrency XRP serves as a “security.”
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