Federal Judges Cast Doubt on XRP's Non-Security Status

A landmark ruling in July 2023 shook the cryptocurrency world, classifying XRP as a “non-security” in secondary market sales. However, recent developments have thrown this decision into doubt, sparking concerns about XRP’s regulatory status.

Now, federal judges are reevaluating the application of crucial legal standards, leaving Ripple and its investors on edge. Yeah – it’s just as serious as it sounds. Here’s a closer look.

Reconsidering the Status

In a surprising turn, two federal judges have cast doubt on the validity of classifying XRP as a “non-security.” The Howey Test, a cornerstone of securities law, is under scrutiny, raising the specter of XRP being deemed an unregistered security. Charles Gasparino, a prominent journalist and XRP expert, has questioned the soundness of Judge Analisa Torres’ interpretation of the Howey Test, suggesting a potential reversal of her ruling.

A reminder to the $XRP community: So far TWO Fed judges including the one considered the “dean” of corporate-law judiciary (Rakoff) have scoffed at arguments using Judge Torres’ @Ripple ruling as precedent because the ruling itself is so incoherent. No one can guarantee the… https://t.co/aOwfZ8ERfF
— Charles Gasparino (@CGasparino) March 31, 2024

Beyond Ripple, federal judges are scrutinizing the application of the Howey Test, crucial for determining an asset’s status as a security. If this legal standard is overturned, XRP could face reclassification, spelling trouble for both Ripple and its stakeholders.

Read More: Ripple News: Only 500 Million XRP Unlocked from Escrow; More to Come?

Active Debate in the Community

While Gasparino has sounded the alarm, XRP supporter Bill Morgan remains skeptical. Morgan challenges Gasparino’s assertions, demanding concrete evidence of judicial skepticism. The debate underscores the complexity of legal proceedings and the stakes involved for all parties.

To assist your readers, please point out the references in any decision of these two judges in which they ‘scoff’ at arguments based on the decision in SEC v Ripple. You are surely not talking about two motions to dismiss given the nature of such motions compared to a summary… https://t.co/nruAXvCCD9
— bill morgan (@Belisarius2020) March 31, 2024

Stuart Alderoty, Ripple’s Chief Legal Officer, has expressed skepticism about the SEC’s influence on legal proceedings. As Ripple’s legal battle with the SEC unfolds, uncertainties loom large, with potential ramifications for the broader cryptocurrency market.

Market Dynamics in Focus

Despite legal headwinds, on-chain data reveals intriguing market dynamics. Large XRP holders, colloquially known as whales, are accumulating XRP, signaling confidence in future price movements. However, XRP’s price has remained range-bound for over a year, testing investor patience.

Market Outlook and Price Analysis

Technically, XRP’s price hovers above the crucial $0.60 mark, with bullish indicators suggesting a potential recovery. Analysts eye a recovery towards the year-to-date peak of $0.7440, albeit contingent on broader market conditions. Conversely, downside risks loom large, with potential price declines to key support levels, reflecting the market’s sensitivity to legal uncertainties.

While stakeholders remain hopeful for a price recovery, the path forward remains fraught with challenges for XRP.

Also Check Out: Ripple CTO Busts Top XRP Price Myths: Here’s Everything You Need to Know!

Source: https://coinpedia.org/news/federal-judges-cast-doubt-on-xrps-non-security-status-whats-next/