Benzinga - Broker Bernstein highlighted that while the U.S. district court found institutional sales of Ripple's (CRYPTO: XRP) token to be in violation of securities law, the fact that it's not considered a security when sold through exchanges or programmatic sales is a major victory for the crypto industry.
Other observers, including analysts at Gautam Chhugani, noted that the recent ruling alleviates the "securities overhang on tokens sold on exchanges," and provides "major relief for all tokens sold on secondary platforms."
The court's decision underscores the necessity for a distinct digital assets framework.
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The ruling also suggests that the "Howey test cannot be straight applied to tokens on exchange platforms, and thus the context of the transaction matters," Coindesk reported.
This interpretation weakens the U.S. Securities and Exchange Commission’s (SEC) position that securities law is clear, and no separate clarity is needed for digital assets.
Crypto Rally: Prices of crypto-related tickers spiked after the Ripple ruling. But even as the shares of Coinbase (NASDAQ: COIN) surged over 24% on Thursday, Berenberg cautioned that the extent of the rally might not be justified.
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Analysts, including Mark Palmer, pointed out that the court's ruling did not specifically reject the SEC's argument that many tokens bought and sold on secondary-market transactions on Coinbase's exchange are unregistered securities.
The SEC has accused Coinbase of operating as an unregistered broker, exchange, and clearing agency simultaneously, violating federal securities law.
Berenberg also noted that the court's decision that XRP is not a security on its own is "immaterial in the context of COIN."
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