A California judge has ruled that the lawsuit filed by the Gary Gensler-led Securities and Exchange Commission against cryptocurrency exchange Kraken will proceed to trial, paving way for another high-voltage legal battle between the regulator and a high-profile blockchain-based company.

However, in a partial victory, the judge agreed that the cryptocurrencies named by the SEC in the lawsuit were “not themselves securities,” although the nature of their purchase and sale brings them within the purview of the act.

The SEC seeks to permanently bar Kraken from further securities violations and demands disgorgement of its “ill-gotten gains” along with other civil penalties.

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Why It Matters: This lawsuit follows a series of legal actions by the SEC against major cryptocurrency exchanges.

Both Binance and Coinbase, two of the biggest cryptocurrency exchanges, have decided to legally contast SEC’s claims. Judicial rulings earlier this year denied both of their motions to dismiss the case, paving way for the trial.

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