The surge was driven in large part by investors who interpreted Judge Torres’ ruling as representing a rejection of the SEC’s argument in the lawsuit it filed against COIN on June 6 that many of the tokens bought and sold in secondary-market transactions on the company’s exchange are unregistered securities, said analysts led by Mark Palmer.
Coinbase (COIN) shares rose over 24% Thursday after the U.S. District Court dismissed part of the Securities and Exchange Commission’s (SEC) case against Ripple Labs and ruled that the company’s XRP token is not a security. However, investment bank Berenberg said in a research report that the extent of the rally may not be warranted.
A closer reading of the court’s ruling shows that the judge specifically did not reject the SEC’s argument that many of the tokens bought and sold in secondary-market transactions on Coinbase’s exchange are unregistered securities. The SEC said it was suing the Nasdaq-listed crypto exchange on allegations of violating federal securities law.
The German investment bank has a hold rating on Coinbase shares and a price target of $39. The stock closed yesterday at $107.