Bitnomial SEC Lawsuit Causes Disagreement Among Agencies

Key Points:

• Crypto exchange Bitnomial sued the SEC, challenging its classification of XRP as a security.
• The Bitnomial SEC lawsuit follows the agency’s recent appeal in the Ripple case and is the second legal challenge this week.

According to Fox Business, crypto derivatives exchange Bitnomial has filed a lawsuit against the U.S. Securities and Exchange Commission over its authority regarding a planned futures contract for XRP, currently the seventh-biggest cryptocurrency by market capitalization.

Read more: Cumberland DRW Lawsuit Initiated by SEC for Securities Law Violations

Bitnomial SEC Lawsuit: CFTC at Odds over XRP Futures with SEC

The Bitnomial SEC lawsuit, filed in an Illinois district court on Thursday evening, contests the agency’s belief that XRP is a security and thus under its regulation.

The move is after Bitnomial, regulated by the CFTC, first cleared the paperwork for an XRP-to-US Dollar futures contract in August. The move came after a federal judge ruled that XRP sales on secondary markets did not constitute securities.

However, the SEC, after the filing, contacted Bitnomial to assert that the XRP futures fall into the ambit of both the SEC and CFTC. The regulator said Bitnomial would have to file as a national securities exchange to offer the futures product.

The Bitnomial SEC lawsuit argues the agency oversteps its authority in classifying the XRP futures as “security futures,” which would require their joint regulation. Bitnomial insists XRP is not an investment contract but comes solely under the regulation of the CFTC. The exchange wants the court to rule that XRP futures are not securities and bar the SEC from enforcing its claim on the products.

Ripple Case Heats Up as SEC Faces New Onslaught of Legal Attacks

The SEC still claims that XRP is a security under the Securities Exchange Act, continuing its very long-running legal battle over the asset. Most recently, the commission filed a notice of appeal in the Ripple case following a New York federal judge’s ruling that XRP isn’t a security when traded on exchanges. Ripple also filed a cross-appeal. However, the details have not been made public yet.

The Bitnomial SEC lawsuit is the legal challenge against the agency this week. Crypto.com is also taking to the courts, alleging the SEC is overstepping its jurisdiction by classifying most crypto assets as securities.