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According to JPMorgan analysts, the court’s decision regarding Ripple’s XRP has benefited Coinbase the most, as it alleviates the pressure from the SEC, which has been attacking cryptocurrency exchanges on allegations of conducting unregistered securities sales.
JPMorgan stock analysts, led by Kenneth Worthington, stated in a report published on July 14th, “The decision appears to be a significant gain for Coinbase in the case brought against them by the SEC. Considering Coinbase’s market-leading position and respected reputation in the industry, we believe it is in a very good position to benefit from increased investor confidence and regulatory clarity.”
Ripple partially declared victory against the SEC when the US court ruled on July 12th that sales made on secondary markets, such as cryptocurrency exchanges, do not classify XRP as a security. However, sales made to institutional investors were deemed to be securities. According to JPMorgan analysts, this decision is favorable for Coinbase because it could serve as a precedent for all 13 altcoins that the SEC claimed to be securities in the case brought against the exchange last month.
In the case against Coinbase, the SEC classified SOL, ADA, MATIC, FIL, NEAR, VGX, DASH, SAND, ICP, NEXO, AXS, CHZ, and FLOW as securities.
The analysts noted, “If the Ripple case continues, it will be more difficult for the SEC to argue that the 13 altcoins are securities and that Coinbase conducted unregistered securities sales, thus impeding its ability to meet future licensing and regulatory requirements.”
Issues Still Remain for Coinbase
On the other hand, analysts emphasized that the court’s XRP decision does not mean a complete victory for Coinbase, as the SEC’s lawsuit does not solely target altcoins traded on the exchange and classified as securities. According to the SEC, Coinbase’s stake and wallet products also violate securities laws. Therefore, JPMorgan analysts believe that Coinbase has not completely transitioned into a trouble-free zone. They also highlighted the possibility of the SEC appealing the XRP decision to further increase uncertainty.
