Ripple's Victory Provides Clarity for Investment Giant VanEck

VanEck, a renowned global investment manager, has issued an advisory note to Registered Investment Advisors (RIAs) on the nature of tokens, particularly in relation to their purchase via blind/bid transactions. 

This comes on the heels of the ongoing Ripple Labs vs. SEC case, a landmark trial that is shaping the way tokens are viewed in the realm of securities.

As VanEck notes, tokens acquired through programmatic, secondary sales, such as blind bid/ask transactions on decentralized exchanges, are not deemed securities. 

A pivotal ruling 

The federal district judge Analisa Torres handed down a decision in favor of Ripple Labs. Her ruling clarified that XRP's programmatic sales to the general public and distributions to its employees did not equate to sales of unregistered securities. 

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This judgment has injected some clarity into the cryptocurrency sector, but VanEck has warned that the case is still in the trial phase.

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For RIAs, the firm emphasizes the importance of beginning the client onboarding process with a qualified digital asset custodian, such as Standard Custody or Gemini. This facilitates a seamless adaptation if a token's status is subsequently reclassified as a security. 

In terms of classification criteria, VanEck offers two paradigms for RIAs: a conservative approach that mandates custodial holding for any token flagged by the SEC as a security, and a more nuanced perspective that references third-party classifications, including those by cryptocurrency exchanges.