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