In a recent ruling, U.S. District Judge Katherine Failla rejected allegations against Coinbase Wallet, marking a victory for self-custody wallets and DeFi applications. The judge found that the SEC adequately claimed that Coinbase was unlicensed and lacked registration for its crypto staking offering. However, the SEC's allegations that Coinbase acted as a broker through Coinbase Wallet were dismissed.

The ruling is seen as a win for browser-based wallet extensions and similar applications as they may use this court order to combat similar lawsuits. Industry experts and lawyers shared varying opinions on the outcome, with some considering it a significant setback for the SEC. Despite some positives in the judge's decision, overall, the SEC is seen as having an advantage.

Even though certain aspects of the ruling favor DeFi, Chervinsky expressed disappointment in the issues where the SEC was supported by the court. The case will proceed to discovery, allowing Coinbase and the SEC to gather evidence and refine their arguments.

This case is just one part of the broader lawsuit filed by the SEC against Coinbase regarding the listing of specific tokens and allegations of operating as an unregistered exchange and broker-dealer.