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Bernstein points out that the court ruled that institutional sales of XRP were in violation of securities laws. This was still a significant verdict that removed the overhang from XRP, and holders of tokens who purchased it via exchanges.

Analysts led by Gautam Chugani said that the ruling reduced “securities on tokens traded on exchanges” and was a “major relief to all tokens on secondary platforms.”

The note stated that the court’s decision highlights the need for a different digital assets framework. Given its interpretation, it is clear the “Howey Test cannot be directly applied to tokens traded on exchange platforms and the context of the transactions matters.”

The analysts stated that “this weakens U.S. Securities and Exchange Commission (SEC)’s stance” that the Securities Law is clear and there is no need for a separate clarification of digital assets given the context interpretation required in each case.

Bernstein believes this is a landmark judgment and that it will “significantly shift the regulatory cloud over the crypto-industry”. It expects institutional investors to reconsider digital assets because of the regulatory challenges.

Read more: Ripple XRP Token surges 96% after partial victory in SEC lawsuit