On Wednesday local time, US District Judge Katherine Polk Failla presided over a hearing on Coinbase's request to dismiss the SEC civil lawsuit. During the five-hour hearing, Failla seemed skeptical of the SEC's views, telling the SEC's lawyers in court, "I want to know how your standards don't involve the collectibles market or commodities. I'm concerned your argument is too broad." A federal judge expressed doubts about the Securities and Exchange Commission's (SEC) claims, noting that supporting the SEC's claims could inadvertently expand the definition of securities to areas such as collectibles that are not within the SEC's regulatory scope. At the end of Wednesday's hearing, Failla did not make a ruling, but is expected to do so in the coming months. After the hearing, Citigroup raised its target price for Coinbase from $90 to $151.

The SEC sued Coinbase in June last year, alleging that it was an unregistered securities dealer. Coinbase filed a motion to dismiss (MTD) in August, arguing that the SEC did not have the legal authority to regulate cryptocurrency exchanges.