The legal fight between Ripple and Securities and Exchange Commission is getting more complex.
Recent developments have seen two federal judges challenge Judge Torres’ previous classification of XRP as a non-security on exchanges and a security for institutional sales. The decision has been questioned by lawsuits filed against Coinbase, Terraform Labs and other companies.
This classification is determined by the Howey Test. It is a legal standard used to determine whether an asset qualifies for securities regulation as an investment contract. This test includes four main criteria: investment, expectation of profit, common enterprise and reliance upon others’ efforts.
In her ruling in July last year, Judge Torres applied the Howey Test to separate XRP into two groups. However, this application is being scrutinized now. Charles Gasparino, a journalist at Fox Business News, recently criticized the application of the Howey test in the Ripple case, citing its “incoherence.”
Gasparino, in a tweet dated March 31, stated that two federal…
