The ongoing legal battle between Ripple Labs Inc. and the Securities and Exchange Commission (SEC) continues to unfold, with new developments shedding light on the security status of XRP. This uncertainty has been further intensified by legal disputes involving Coinbase and Terraform Labs.
Previously, US District Judge Analisa Torres ruled in July 2023 that XRP was classified as a non-security on exchanges but considered a security for institutional sales. However, this ruling is now being challenged as two federal judges overturned Judge Torres’s application of the Howey Test to XRP.
Judge Torres’s classification of Ripple Labs’ XRP relied on the Howey test, a legal framework used to determine whether an asset is an investment contract and thus a security under securities regulations. The application of this test to cryptocurrencies has been a subject of debate, with arguments for and against crypto meeting the requirements.
American journalist Charles Gasparino expressed dissatisfaction with the use of the Howey test, citing its “incoherence” in application. While it remains uncertain whether Judge Torres’s ruling will be overturned, there are indications that her legal analysis may be flawed.
In addition to Gasparino’s concerns, Ripple’s Chief Legal Officer, Stuart Alderoty, stated that the SEC has influenced the judge’s decision in the Coinbase lawsuit. However, he believes that the SEC will struggle to provide evidence to support its allegations.
Amidst these legal challenges, the price of XRP has experienced fluctuations. Trading within a narrow range of $0.9380 (peak on July 13, 2023) to $0.4226 (low on August 14, 2023) for nearly 460 days, XRP’s $0.67 support level has now turned into a resistance level.
Currently, XRP is trading at $0.6124, indicating a 2.6% decrease in the past 24 hours, with a market capitalization of $33.5 billion. Interestingly, large crypto holders, known as whales, have been accumulating XRP during this price decrease, potentially influencing a reversal of the bearish trend.
Whales, owning between 10 million and 100 million XRP tokens, have accumulated an additional 190 million XRP tokens to their holdings between March 27 and April 1, according to data from the on-chain analytical platform Santiment.
Previously reported, XRP recently formed a Golden Cross, which crypto analyst Egrag Crypto believes could drive its price to $5.5. However, the recovery of XRP’s price is contingent on external factors, particularly fluctuations in the price of Bitcoin. A decline in Bitcoin’s price could have an impact on altcoins like XRP, potentially leading to a market downturn.