The legal battle between Ripple Labs Inc. and the SEC is becoming more complicated as new developments regarding XRP’s security status emerge. Reports suggest that Federal Judges have dismissed XRP’s non-security classification, adding to the uncertainty surrounding the case. As a result, XRP’s price has stalled at a psychological level of $0.60.
Previously, US District Judge Analisa Torres ruled that XRP was classified as a non-security on exchanges but as a security for institutional sales. However, two federal judges have now overturned Judge Torres’ application of the Howey Test to XRP, which determines whether an asset is an investment contract and therefore a security under securities regulations. The application of this test to cryptocurrencies is a contentious issue.
The use of the Howey Test has been criticized for its incoherence, and there are indications that Judge Torres’ ruling may be flawed. Stuart Alderoty, Ripple’s Chief Legal Officer, also believes that the SEC has influenced the judge’s decision in the Coinbase lawsuit. However, he is confident that the SEC will struggle to provide evidence to support its allegations.
Amidst these legal challenges, the price of XRP has been fluctuating. It has been trading within a narrow range for almost 460 days, with a support level of $0.67 turning into resistance. Currently, XRP is trading at $0.6124, showing a decrease of 2.6% in the past 24 hours, with a market capitalization of $33.5 billion.
Despite the price decrease, large crypto holders known as whales have been accumulating XRP. They have added 190 million XRP tokens to their holdings between March 27 and April 1. This trend, along with the recent formation of a Golden Cross, has the potential to drive up XRP’s price to $5.5. However, the recovery of XRP’s price is dependent on external factors, particularly the price of Bitcoin. A decrease in Bitcoin’s price could negatively impact altcoins like XRP and lead to a market slump.