Cryptocurrency derivatives exchange Bitnomial has filed a lawsuit against the US Securities and Exchange Commission (SEC) for jurisdiction over XRP futures contracts. This action is based on the SEC’s stance that XRP futures are “Security Futures”, thus allowing the SEC to regulate. The lawsuit takes place against the existing conflict between Ripple and the SEC over the status of XRP.
In August, Bitnomial sought approval to list its XRP-USD futures contract after a court decision in the SEC lawsuit against Ripple found that XRP was not a security in exchange transactions. However, the SEC continued to insist that XRP is a security, leading Bitnomial to proceed with its legal actions.
The SEC claimed that XRP futures contracts fall under the purview of both the SEC and the Commodity Futures Trading Commission (CFTC), and demanded that Bitnomial should register as a national securities exchange before offering XRP futures. Bitnomial disagrees with this categorization as it believes XRP is not a security and should be regulated by the CFTC, as is the case for bitcoin and ether futures.
The lawsuit forms part of an increasing number of legal battles concerning the SEC’s control over digital currency. According to Bitnomial’s CEO, Luke Hoersten, the lawsuit is significant not only for XRP but for all digital assets. Bitnomial emphasizes that it is in a unique position, as it has not been accused of wrongdoing, to push for regulatory clarity.
In the meantime, Ripple CEO Brad Garlinghouse has criticized the SEC’s recent actions, especially after the SEC charged Cumberland DRW LLC with operating as an unregistered dealer in the crypto market. The SEC alleges that Cumberland conducted more than $2 billion in transactions classified as securities without proper registration. Moreover, Crypto.com recently sued the SEC, accusing it of overstepping its mandate by classifying several tokens listed on its platform as securities.
Overall, the situation between Bitnomial, the SEC, and other players in the crypto industry continues to evolve, highlighting the complexities surrounding cryptocurrency regulation.
Source: Ripple has filed a cross-appeal