New revelations regarding the security status of XRP have emerged, prolonging the Ripple versus SEC case. The involvement of Coinbase and Terraform Labs in legal disputes adds to the uncertainty surrounding the matter. The complexity of the ongoing legal battle between Ripple Labs Inc. and the Securities and Exchange Commission (SEC) has increased after reports of Federal Judges rejecting XRP’s non-security classification. This development has caused XRP’s price to stagnate at the psychological level of $0.60.
As previously reported by Crypto News Flash, US District Judge Analisa Torres ruled in July 2023 that XRP was classified as a non-security on exchanges, but as a security for institutional sales. However, this ruling is now being challenged as two federal judges have overturned Judge Torres’s application of the Howey Test to XRP.
Judge Torres’s classification of Ripple Labs’ XRP relies on the Supreme Court’s Howey test, a legal framework used to determine if an asset is an investment contract and thus a security under securities regulations. The application of the Howey test to cryptocurrencies is a controversial issue, with arguments both for and against crypto passing the test.
Charles Gasparino, an American Journalist at Fox Business News, expressed his dissatisfaction with the use of the Howey test, citing “incoherence” in its application. While it is still uncertain if Judge Torres’s ruling will be reversed, there are indications that her legal analysis is flawed.
Stuart Alderoty, Ripple’s Chief Legal Officer, voiced concerns about the SEC influencing the judge’s decision in the Coinbase lawsuit. However, he believes the SEC will struggle to provide evidence to support its allegations.
Amidst these legal challenges, the price of XRP has experienced fluctuations. For nearly 460 days, XRP has been trading within a narrow range of $0.9380 (July 13, 2023 peak) to $0.4226 (August 14, 2023 low). This has transformed the altcoin’s $0.67 support level into a resistance level.
According to the latest data from Marketcap, XRP is currently trading at $0.6124, showing a 2.6% decrease in the past 24 hours. Its market capitalization stands at $33.5 billion.
Simultaneously, large cryptocurrency holders, commonly known as whales, have been accumulating XRP as its price decreases. This trend may help reverse the bearish course in the long run. Data from the on-chain analytical platform Santiment reveals that whales owning between 10 million and 100 million XRP tokens have added 190 million XRP tokens to their holdings between March 27 and April 1.
As previously reported by Crypto News Flash, XRP recently formed a Golden Cross, a bullish signal indicating a potential price increase, with crypto analyst Egrag Crypto predicting a price surge to $5.5.
However, the recovery of XRP’s price depends on external factors, particularly fluctuations in the price of Bitcoin. A decline in the price of Bitcoin could affect altcoins like XRP and potentially lead to a market downturn.