Coinbase (NASDAQ:COIN) stock has surged roughly 25% over the past two days after one U.S. district court rejected part the U.S. Securities and Exchange Commission’s (SEC) case against Ripple Labs and XRP (XRP-USD). Indeed, U.S. District Court Judge Analisa Torres, who presides over the Southern District of New York, ruled Thursday that XRP is not to be considered a security in and of itself.
This is a major win for crypto fans, users of Coinbase and especially owners of the XRP crypto. Fears have long swirled that U.S. regulators would attempt to bring crypto into federal moderation by way of asserting that XRP should legally be considered a security, thus making it liable to the same rules as other securities like stocks and bonds. Indeed, crypto fans have long been concerned that hundreds of other decentralized currencies would also be brought under the U.S. government’s regulatory umbrella as a result.
If you recall, Coinbase was sued by the SEC in June after being accused of operating an unregistered securities brokerage. Now with the XRP ruling, though, Coinbase leadership seems to be even more convinced that the SEC’s case is destined to fall through.
Coinbase Chief Legal Officer Paul Grewal told CNBC on Friday:
“For exchanges, for tokens that are listed on exchanges, for regular investors, there’s no question that this ruling strikes a blow to the idea that somehow securities are being traded when people go onto exchanges and trade the assets […] I think we will win. Now, I thought we would win before this decision. We think this decision has only further strengthened the case.”
COIN Stock Soars Despite Uncertainty Over Court Ruling
Despite the rampant optimism the XRP court ruling has induced, some believe that COIN stock’s surge may be premature. In fact, one team of analysts led by Mark Palmer believes Torres’ verdict represents only a narrow win for crypto fans. According to Palmer’s team, the judge’s decision “pertained solely to the primary market transactions through which Ripple sold XRP, while COIN is in the business of facilitating secondary-market transactions on its exchange.”
Indeed, the scope of the judge’s ruling may be “immaterial in the context of COIN since she also acknowledges that the sale of XRP can in fact represent a securities transaction.”
That said, investors have already voted with their wallets and are clearly encouraged. COIN stock is up to $107 per share at the time of this writing, its highest level since May 2022. The stock has more than doubled in the past month, with crypto fans hopeful that decentralized currencies may well remain decentralized.
Not alone, the XRP crypto is also well in the green lately, up 25% in just the past 24 hours. Currently, XRP trades at 75 cents per coin, the highest level for the crypto since April 2022.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
