The Manhattan federal judge who ruled on Thursday that Ripple Labs is not liable under federal securities law for selling XRP tokens on the open market devised an entirely new framework for determining whether crypto tokens are securities -- and defense lawyers say her analysis could be a big help in private litigation against crypto issuers and exchanges.

U.S. District Judge Analisa Torres granted summary judgment to Ripple on claims by the U.S. Securities and Exchange Commission that it peddled unregistered securities through sales to retail investors on digital asset exchanges. Those investors, Torres reasoned, did not know that Ripple was on the other side of the trades, so they could not have expected that Ripple would use their money to boost the value of the tokens.

But the judge reached a different conclusion about Ripple’s XRP sales to sophisticated institutional investors. Ripple pitched those investors on its plans to make XRP an indispensable mode of blockchain payment. So, according to Torres, when Ripple sold XRP to those investors, it was engaged in securities transactions under the U.S. Supreme Court’s longstanding Howey test.

Under Torres’s ruling, in other words, XRP was simultaneously a security (in Ripple’s sales to institutional investors) and not a security (in sales to retail investors on crypto exchanges). It all hinges, in the judge’s analysis, on the expectations of the buyer.

That sounds complicated – which is exactly why defense lawyers believe that the ruling will help crypto defendants avert, or at least narrow, class actions by investors who claim they were duped into buying unregistered securities.

Securities class actions, after all, are premised on the idea that all investors in a particular corporate stock or bond are more or less the same. Torres said in her Ripple ruling that XRP purchasers aren’t interchangeable – and that securities laws don’t protect all of them.

“It just got much harder for plaintiffs to bring weak cases,” said defense lawyer Jason Gottlieb of Morrison Cohen, who closely tracks private crypto litigation. “They cannot simply allege, 'I bought a token and therefore I bought an unregistered security,' which was the path the SEC was headed down, and a path that the private plaintiffs’ bar was following.”

There are a few important caveats before I explain why Cohen and other crypto defense counsel are hyped about Torres’s ruling. Torres is just one trial judge. Her decision doesn’t bind any other court and, as my Reuters colleague Jody Godoy noted on Thursday, the decision can eventually be appealed.

Torres, moreover, was careful to say that her opinion was grounded in the specific facts of the SEC’s case against Ripple. Obviously, plaintiffs in other cases will contend that their facts are different, said crypto plaintiffs' lawyer Sean Masson of Scott + Scott. Masson also highlighted a footnote in the Ripple ruling in which Torres explicitly said that she was not addressing whether all secondary trading in XRP is covered by federal securities law because that question was not presented in the SEC’s case.

“The decision does make it harder” for plaintiffs to allege classwide securities fraud against crypto defendants, said Masson, adding that plaintiffs may be able to get around the complications of Torres’s analysis by asserting alternative theories of common law fraud or state securities law violations.

“Harder is not impossible,” Masson said.

One early test of the impact of Torres’s analysis in private litigation will likely be in a vast securities class action against Ripple itself. A federal judge in Oakland, California, certified a class of XRP purchasers earlier this month, based primarily on her reasoning that there is a single, objective answer to the question of whether XRP is a security under the Howey test.

The Torres ruling arguably casts doubt on that premise. A Ripple spokesperson said the company is “evaluating all options” in the class action, in light of the Torres decision. Class counsel from Susman Godfrey did not respond to my query.

Defense lawyers told me that by focusing not on the nature of the tokens but on the particulars of token sales, Torres has given other judges a new way to think about whether digital assets are securities. Nick Morgan of Paul Hastings described Torres’s approach as “dynamic,” rather than static, and predicted that other judges will agree that her analysis makes more sense than what he called “the shorthand approach of ‘once a security, always a security.’”

The Torres approach, said Kayvan Sadeghi and Michelle Kallen of Jenner & Block, won’t necessarily preclude classwide securities fraud claims against token issuers, but it will complicate them, especially if other judges adopt Torres’s reasoning that federal securities laws do not apply when retail investors buy tokens from unknown sellers on crypto exchanges.(The defense lawyers I talked to are not involved directly in the Ripple case, but Jenner and Paul Hastings authored amicus briefs backing Ripple.)

The Torres decision does leave open tough questions about whether crypto exchanges such as Coinbase and Binance can be liable, as the SEC has alleged in recent enforcement actions, for selling unregistered securities. (Private plaintiffs have brought class actions alleging parallel claims against those exchanges. Both were dismissed by trial courts but are on appeal at the 2nd U.S. Circuit Court of Appeals.)

In one reading of the Torres opinion, blind trades of crypto assets, in which the buyer and seller don’t know each other’s identity, are not securities transactions. In that regard, a defense lawyer told my colleague Godoy, the ruling could boost crypto exchange arguments that they did not sell unregistered securities.

But could centralized exchanges, which briefly hold the digital assets being transferred from seller to buyers, be recast as sellers? If so, under the Torres framework, purchasers who acquired tokens from a centralized exchange might be able to argue that the transaction was a securities sale because both sides were aware that the exchange would profit from the deal. That could put the exchange back on the hook for selling an unregistered security.

It’s a twisty, longshot argument, but it shows the complexity of the Torres framework. The next couple of years of private crypto litigation are going to be wild.