Coinbase (COIN) shares have jumped more than 30% since June 15 following news that Blackrock (BLK) filed an application for a spot bitcoin (BTC) exchange-traded-fund (ETF), outpacing the 20% gain in the bitcoin price over the same period, investment bank Berenberg said in a research report Thursday.

“We believe the surge in Coinbase’s share price was driven not only by the positive change in sentiment toward bitcoin and cryptocurrencies resulting from the prospect of the world’s largest asset manager playing a prominent role in the space, but also by the fact that the company was designated as the provider of custody for the fund,” analysts led by Mark Palmer wrote.

However, investors looking at the crypto exchange’s shares as a play on increasing institutional adoption of digital assets should first consider the risks the company is facing that could trigger a reversal of the stock’s recent gains, the report said.

The U.S. Securities and Exchange Commission (SEC) said it was suing Coinbase earlier this month, accusing it of violating federal securities law. The same day, a task force of 10 U.S. state regulators said it was coming after the firm, alleging it violated state securities laws by offering its staking program to residents.

Berenberg notes that the potential cease and desist orders on Coinbase’s staking rewards program are looming. The deadline is July 4, and the bank says it is highly unlikely Coinbase will be able to convince the states that their concerns are misplaced. Staking represented 9.5% of Coinbase’s net revenue in first-quarter 2023.

The downside from the loss of potential revenue from the staking rewards program is much larger than the potential upside from the firm’s role as custody provider for Blackrock’s planned spot bitcoin ETF, the note said.

The SEC could still target the USD Coin (USDC) stablecoin as an unregistered security, which would “jeopardize the significant amount of revenue that Coinbase generates from its portion of the interest income earned on the assets backing the stablecoin,” the report added.

The bank has a hold rating on the stock with a $39 price target. The shares closed at $72.43 on Thursday.

Read more: Coinbase Shares Are ‘Uninvestable’ in the Near Term: Berenberg