U.S. District Judge Katherine Polk Failla has allowed the SEC to proceed with its lawsuit against Coinbase Global Inc.

The ruling dismissed one regulatory claim but upheld that Coinbase may have operated as an unregistered securities exchange, broker, and clearing agency.

Most of Coinbase's alleged violations satisfy the Howey test criteria for being considered investment contracts.

The case against Coinbase is part of a broader SEC effort to regulate digital asset companies, amidst a similar trial against Binance.

Coinbase and the SEC must submit a case management plan by April 19, 2024, indicating a potentially lengthy legal process ahead.

The regulatory scrutiny is expected to impact the cryptocurrency market, with a predicted shortage of supply potentially driving Bitcoin prices higher.