The legal battle between Ripple Labs and the Securities and Exchange Commission (SEC) over the classification of XRP as a security is becoming increasingly 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. This decision is now being questioned in lawsuits involving Coinbase and Terraform Labs.

Notably, the classification of XRP as a security revolves around the Howey Test, a legal yardstick employed to ascertain whether an asset qualifies as an investment contract and, consequently, a security under securities regulations. This test comprises four key criteria: the investment of money, anticipation of profits, a common enterprise, and reliance on the efforts of others.

In her ruling last July, Judge Torres used the Howey test to separate XRP sales into two groups, but this application is now being scrutinized. Charles Gasparino, a journalist at Fox Business News, recently criticized the application of the Howey test in the Ripple case, citing its “incoherence.”

In a tweet on March 31, Gasparino stated that two federal judges, including Judge Rakoff, who is considered an authority in corporate-law judiciary, have questioned the arguments presented in Judge Torres’ Ripple ruling. Gasparino further noted that while it is uncertain if the ruling will be overturned and XRP will be declared an unregistered security, “the signs are there that [Judge Torres’s] legal analysis is faulty”.

Interestingly, just a day prior, the pundit reported that securities lawyers also believe a federal judge’s ruling against Coinbase serves as a cautionary signal to XRP holders “that judge Torres’s Ripple analysis is likely to be reversed by the federal courts.”

Meanwhile, these legal challenges have affected the price of XRP, which has traded in a tight range for the past 690 days or so. However, XRP has shown bullish strength, forming higher lows and indicating potential accumulation at the current support area.

Moreover, according to Santiment data, whales holding between 10 million and 100 million XRP tokens added 190 million XRP to their holdings from March 27 to April 1. This group of whales tends to accumulate during price drops and sell at peak prices, suggesting they may be preparing for a potential price increase.

At press time, XRP was trading at $0.59, reflecting a 1.43% surge over the past 24 hours.