The shares of Coinbase (COIN), rose by over 24% on Thursday, after the U.S. District Court dismissed a part of the Securities and Exchange Commission (SEC’s) case against RippleLabs and decided that the company’s token XRP is not a securities. However, Berenberg, an investment bank, said the extent of this rally may not have been warranted.

The surge in demand was largely driven by investors who saw Judge Torres ruling as a rejection of SEC’s argument that tokens purchased and sold on secondary markets on COIN’s exchange were unregistered securities.

The report stated that a closer look at the court’s decision shows that the judge did not specifically reject this argument.

The SEC announced that it is suing Nasdaq listed crypto exchange over allegations of violations of federal securities laws. The regulator claims that Coinbase operated simultaneously as a broker, an exchange, and a clearing agency. The SEC stated that Coinbase solicited clients, handled orders and allowed bids, as well as acting as an intermediary.

The analysts noted that the judge’s decision “pertained only to the primary-market transactions through which Ripple was able to sell XRP while COIN facilitates secondary-market trades on its exchange.”

Berenberg claims that the judge’s ruling that XRP as a stand-alone currency is not a financial instrument is “immaterial” in the context COIN, since the judge also admits that a sale of XRP could be a securities transaction.

German investment bank Deutsche Bank has assigned Coinbase shares a Hold rating and set a target price of $39. Yesterday, the stock closed at $107.

Read more: XRP ruling a ‘landmark’ judgment, weakens SEC’s stance against crypto: Bernstein

Sheldon Reback is the editor.