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Ripple (XRP)
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Banking Giant Barclays Backing Coinbase After XRP Win Over SEC: Will $COIN Keep Rising?

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Teuta Franjkovic
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Key Takeaways
  • Wall Street analysts, including Barclays are praising the XRP decision for Coinbase
  • Wall Street institutions, including J.P. Morgan, believed the decision would benefit the cryptocurrency exchange

The decision by the U.S. Southern District Court to partially side with payments network Ripple is “incrementally positive” for cryptocurrency exchange Coinbase (COIN), according to a research paper released on Monday by British banking behemoth Barclays.

The Judgement Is Positive For Coinbase

“Given that in some circumstances, a token may not be a security, we consider the judgment incrementally positive for Coinbase,” according to the bank’s analysts, who kept COIN’s rating underweight with a $70 price target. This might offer further clarification for further token issuances.

On July 13, Barclays reduced its rating for Coinbase shares from equal weight to underweight because it anticipated limited near-term drivers for the cryptocurrency exchange’s share price.

Following a similar lawsuit against rival Binance, the Securities and Exchange Commission (SEC) recently accused Coinbase of breaking federal securities legislation.

Barclays made a favorable prediction about Coinbase, which is consistent with what J.P. Morgan and Needham on Wall Street said.

According to a note published by J.P. Morgan on Friday, which rates COIN as neutral, “Coinbase is in the best position to benefit from the improved confidence and regulatory clarity given Coinbase’s market-leading position and respected reputation in the industry.”

Similarly, John Todaro of Needham, who has a buy rating and a $120 price target, stated that the result should only slightly lessen the possibility of regulatory pressure on Coinbase’s stock.

Not All Experts Are Optimistic

After the XRP verdict, not all experts had the same optimistic outlook on Coinbase’s price. The cryptocurrency exchange’s share price increase was exaggerated, according to investment bank Berenberg, which also suggested that some investors may have partially misunderstood the decision.

Coinbase Vs. SEC In Short

On June 6, the U.S. Securities and Exchange Commission brought legal action against Coinbase. The federal agency subsequently asserted that Coinbase operated a national securities exchange and broker without a license through its cryptocurrency asset trading platform.

The SEC further asserted that at least 13 crypto assets, including the tokens for Solana and Cardano that Coinbase made available to customers, meet the criteria for “crypto-asset securities,” according to the complaint.

According to the SEC, Coinbase’s staking program is both an investment contract and an unregistered security because it enables cryptocurrency investors to “earn financial returns through Coinbase’s managerial efforts.”

Following the SEC’s announcement, Coinbase co-founder and CEO Brian Armstrong tweeted, among other things, “Regarding the SEC complaint against us today, we’re proud to represent the industry in court to get some clarity around crypto rules finally.”

While the commission investigates the most recent ETF application involving Coinbase, the litigation is still active.

Since then, Coinbase has requested that the SEC’s case be dismissed, arguing that the SEC lacks jurisdiction and that its transactions do not fall under the definition of securities.

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Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear. Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3. An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.
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