Bank of America Assesses the Ripple-SEC Court Ruling: Implications for Crypto Sector Remain Murky

The post Bank of America Assesses the Ripple-SEC Court Ruling: Implications for Crypto Sector Remain Murky appeared first on Coinpedia Fintech News

Bank of America (BAC) stated in a research report on Friday that the mainstream adoption of digital assets and increased institutional engagement require a comprehensive regulatory framework. However, the recent U.S. court ruling against the Securities and Exchange Commission (SEC) in its lawsuit against Ripple Labs has not provided clear guidance on the matter, according to the bank.

The ruling was welcomed by the digital asset industry, but the uniqueness of Ripple’s XRP offerings makes it challenging to determine the full implications of the court’s decisions.

Ripple’s Victory Boosted Demand for XRP

Earlier this month, Ripple achieved a partial victory in the case when the U.S. District Court of the Southern District of New York ruled that the sale of its XRP token on exchanges and through algorithms did not amount to investment contracts. However, the court also found that the institutional sale of the tokens violated federal securities laws.

In their analysis, analysts Alkesh Shah and Andrew Moss highlighted that the judge’s ruling was based on the premise that Ripple’s programmatic sale of XRP on digital asset exchanges did not account for an unregistered offer and sale of investment contracts. This was primarily because an initial unregistered offering and sale to institutional investors had already occurred, leading to the creation of a market.

Bank of America emphasized its continued distinction between the trading of blockchain-native crypto tokens, which still lack established regulations, and the trading of tokenized traditional assets, such as exchange-traded funds (ETFs), repos, and gold. The bank noted that the rules governing these traditional assets have already been established, with trading volumes reaching trillions of dollars.