- Federal justices are contesting Judge Analisa Torres’s classification of XRP as a “non-security” in secondary markets, which has created legal ambiguity.
- Significant whale accumulation of XRP notwithstanding market volatility signifies investor confidence and speculative expectation of forthcoming profits.
Judge Analisa Torres introduced a point of differentiation between institutional sales by Ripple and sales of its digital token, XRP, on secondary markets, thereby generating controversy and providing clarity in the cryptocurrency community.
Torres’ statement referred to secondary market transactions as “non-securities,” which raised both expectations and skepticism in the cryptocurrency community.
Judge Torres’ Landmark Ruling is Under Fire
However, this decision is currently being scrutinized due to the dissenting opinions of two federal judges who question Judge Torres’s application of the Howey Test—a well-established legal standard utilized to ascertain whether an asset qualifies as an “investment contract” and, as such, a security under United States law.
The fundamental dispute centers around the contradictory categorization of XRP by Ripple: a “security” when sold institutionally and a “non-security” when traded on secondary markets, reflecting on ETHNews’s prior findings.
An American journalist with a reputation for his knowledge of XRP, Charles Gasparino, has added fuel to the debate by pointing out the “incoherence” in Judge Torres’s application of the Howey Test.
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
Gasparino’s critique highlights an increasing belief that the initial ruling may not endure the judicial scrutiny it is presently undergoing, which could result in XRP being reclassified as an unregistered security.
Stuart Alderoty, chief legal officer of Ripple, analyzed the SEC’s arguments in the recent Coinbase ruling amidst the legal commotion, speculating that the regulatory body’s persuasive strategies may soon encounter a formidable obstacle when obligated to provide empirical evidence.
Market Whales Bet on XRP Amidst Legal Storm
Concurrent with the ongoing legal proceedings, the XRP market has been a hive of activity. In spite of a decline in the price of XRP, on-chain metrics have unveiled a noteworthy pattern of whale accumulation—investors who possess considerable quantities of XRP “buying the dip.”
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Fractal Echoes of 2016–2017: A Positive Sign for XRP?
Inspiring the community further, a tweet from crypto analyst LUDXRPFLR has introduced an additional dimension to the intricate narrative surrounding XRP.
The analyst identified a notable parallel between the present price fluctuations of XRP and its course from 2016 to 2017, predating its extraordinary ascent.
#xrpusdt $xrp https://t.co/CoJUR9MsdG pic.twitter.com/2oOlq3TFX3
— LUDXRPFLR🇳🇱☀️⚡ (@ludnlxrp) March 29, 2024
The aforementioned “fractal similarity” has sparked investor speculation, suggesting the potential emergence of a forthcoming bullish trend comparable to the one that previously propelled XRP to unprecedented levels.
Meanwhile, the XRP price has dropped by 2.06% and 2.95% in the last 24 hours and 7 days, respectively, to $0.6148.