A sharp split between two federal judges in New York has boosted and then dragged down cryptocurrency values in recent weeks, as investors look for clarity on a crucial question: Is crypto a security?

Shares of Coinbase Global Inc., which runs the biggest crypto exchange in the US, soared 24% on July 13 after US District Judge Analisa Torres, weighing a Securities and Exchange Commission lawsuit against Ripple Labs, found that the company’s XRP token wasn’t a security when sold to individual investors on public exchanges. The SEC had argued that it was, and an unregistered one at that.

Then, on Tuesday morning, Coinbase sank as much as 9.5% a day after US District Judge Jed Rakoff ruled in an SEC case against Terraform Labs Pte and its co-founder, Do Kwon, that the company’s Terra USD token may indeed be a security when sold to retail investors.

Read More: Crypto Sales to Public Can Be Securities, Terra Judge Rules

Neither of the rulings, by judges who sit one floor apart in the Manhattan federal courthouse, has any direct effect on a separate SEC case claiming Coinbase is illegally operating as an unregistered securities exchange. But all three cases depend, to some extent, on whether cryptoassets can be regulated under decades-old securities laws.

‘Fanboy Culture’

The split also showed that the legal uncertainty surrounding crypto regulation is affecting the shares of Coinbase and the value of individual cryptocurrencies, several of which rose on Torres’s ruling and fell on Rakoff’s.

Shares of Coinbase were down 3.2% to $91.17 as of 2:18 p.m. in New York on Wednesday. The price of XRP was down 2% to 68 cents.

Some of the impact can be chalked up to the inherent volatility of the asset class, said Richard Levin, chair of the financial technology and regulation practice at the law firm Nelson Mullins Riley & Scarborough LLP.

Part of the mid-July run-up was “overblown, driven by a bit of a fanboy culture,” Levin said.

But there’s no question that Monday’s ruling in the Terraform case “reinjected” uncertainty for investors over the status of crypto tokens, said Gordon Grant, head of sales and trading at Genesis Global Trading.

‘Scar Tissue’

“Market price action seems to suggest it’s thrown a little bit of cold water on the initial enthusiasm” from the Ripple ruling, Grant said. That, along with a hack of the decentralized crypto exchange Curve Finance, contributed to the declines of some altcoins, crypto tokens other than Bitcoin, he said.

Investors now have some “scar tissue” over the crypto regulatory progress, Grant said.

“Just when you thought you get a little clarity,” he said, “you didn’t.”

Read More: Crypto Cheer Over SEC’s Ripple Setback Overlooks Caveats

So the industry will have to navigate its way amid the regulations and court rulings currently shaping the crypto landscape, said Andrew St. Laurent, a partner with Harris St. Laurent & Wechsler LLP, who thinks the prospect of a legislative solution is years away at best.

The Ripple decision “gave some hope to the crypto industry,” because Torres found that certain conduct fell outside the scope of the securities laws, St. Laurent said. But Rakoff’s opinion is “pretty straight up the middle,” similar to other legal decisions in the space.

Levin said the fact that Rakoff expressly called out the ruling of a fellow judge, on a court that routinely handles complex securities cases, suggests the federal appeals court in New York may have to step in to sort out their different interpretations.

“We have one court divided by a common language,” he said.

A Way Forward

The competing views show that “the law is not clear and that you can have very smart judges landing in different places,” said Faryar Shirzad, the chief policy officer at Coinbase.

He said the dissonance supports the argument for forging legislation, like bills recently approved by the House Financial Services and Agriculture committees to provide rules on crypto market oversight. That could pressure the Senate to take up the measures, Shirzad said.

Read More: Fight to Regulate Crypto at Crossroads as Ripple Ruling Looms

Coinbase’s dispute with the SEC threatens its business, and the exchange has vowed to fight all the way to the US Supreme Court if necessary. But there may be another way. If the crypto companies can reach accommodations with regulators, St. Laurent believes, the exchanges could list tokens without fear of government enforcement actions.

“That may be a way forward incrementally, case by case,” St. Laurent said.

“Coinbase and other exchanges will be able to reload with digital assets they can have confidence will not be securities,” he said. “It requires a certain amount of cooperation from regulators.”

At least, that’s the hope, he said, adding: “The government’s not going to stop coming.”

Read More: Coinbase Faces ‘Life or Death’ Battle as US Slams Crypto Company

--With assistance from Allyson Versprille and Dave Liedtka.

(Adds latest share and coin trading in second section and Levin’s remarks on Rakoff’s ruling in third.)

Author: Bob Van Voris, Chris Dolmetsch and Yueqi Yang