The legal case between Ripple and SEC is getting more intense every day. The controversial Howey test is in question, and Ripple’s fate is again struck in the pipeline. In an open revelation, Ripple’s Chief Legal Officer, Stuart Alderoty, brought attention to a critical aspect from Judge Analisa Torres regarding the SEC’s application of the Howey test to cryptocurrency assets.

The Howey test is a legal framework used to determine whether a transaction qualifies as an “investment contract” and thus falls under securities laws.

This discussion came to light after a recent ruling involving Coinbase. U.S. District Judge Katherine Polk Failla allowed the SEC’s lawsuit against Coinbase to continue, although Coinbase won some parts of the case.

Going into details, Alderoty talked about Failla’s ruling, emphasizing a section discussing various interpretations of a crypto “ecosystem.” He highlighted the SEC’s claim that buying any token implies investing in this undefined “ecosystem,” regardless of why someone buys the token.

Interestingly, this observation is similar to what Judge Torres said in the Ripple-SEC case, where she carefully reviewed the evidence and concluded that the SEC had strayed a lot from what the Howey test was supposed to do. This change in direction was especially clear when marketers didn’t make direct promises to investors about a clear business venture.

Can SEC Appeal on XRP Status? 

In response to the user, Bill Morgan suggests that the SEC’s ultimate goal may not be to challenge the finding that cryptocurrencies like XRP aren’t securities. Instead, they might aim for a broader ruling that says cryptos themselves aren’t securities but any sale of them is an investment contract. This implies that even if a crypto doesn’t inherently hold value, buying and selling it could still be seen as an investment.

Since the much debated Howey test is in question, the only crypto with a legal status is now in another mess and experts believe this might affect the cryptocurrency’s price going ahead.