The Crypto Roundup: 02 August 2023 | CryptoCompare.com

Time Stamp: August 2, 2023 4:59 AM
Source Node: 2193806

Coinbase’s shares have outperformed the market after the U.S. District Court’s ruling on July 13 that Ripple Labs didn’t violate securities laws by selling XRP, which a federal judge said isn’t necessarily a security. Another judge, however, has recently disagreed with the Ripple ruling.

According to an investigative report recently released by the investment bank, Berenberg notes that U.S. District Judge Jed Rakoff of the Southern District of New York contested Judge Torres’ differentiation between institutional sales and sales to retail investors on cryptocurrency exchanges.

Rakoff characterized this as a flawed interpretation of the Howey test, which is commonly utilized to ascertain if an asset classifies as a security, according to analysts headed by Mark Palmer.

The discord generated by Rakoff’s rejection could potentially convolute Coinbase’s acknowledgement of the initial ruling in its own ongoing legal battle with the U.S. Securities and Exchange Commission, the bank’s analysts noted, saying Judge Rackoff explicitly referenced Judge Torres’ ruling in his own, saying that the Howey Test does not differentiate between buyers.

Another argument Coinbase is employing against the SEC’s case is the major questions doctrine, a principle that originated from a Supreme Court ruling designed to curtail agencies from exceeding their designated authority, according to the report. Terraform Labs previously invoked this doctrine in its own defense, but Judge Rakoff dismissed its use.

Berenberg upheld its hold rating on Coinbase shares, assigning a price target of $39, reflecting the bank’s perspective that the stock is “uninvestable” for the near term.

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