Bitnomial Sues SEC Over XRP Futures; Challenges its Security Claim

On Thursday evening, crypto derivatives exchange Bitnomial sued US Securities and Exchange Commission(SEC) over Ripple’s XRP Futures and challenged the regulator’s claims that ‘XRP is a security’.

The latest revelation marks yet another twist in the SEC-XRP’s long standing battle. Bitnomial’s lawsuit came after the SEC continues to claim that it has jurisdiction over a planned futures contract that tracks the price of XRP. However, SEC seems unfazed by this lawsuit as it clings to the belief that the cryptocurrency XRP is a security.

Bitnomial, regulated by the SEC’s sister agency the Commodity Futures Trading Commission, had first filed for the XRP US Dollar Futures contract in August after a federal judge ruled against the SEC’s claim that XRP is a security.

The filing reads, “After filing its self-certification with the CFTC, but before Bitnomial listed XRP Futures for trading, the SEC contacted Bitnomial to discuss the contemplated listing. In discussions with Bitnomial, the SEC asserted that Bitnomial would violate the federal securities laws if Bitnomial proceeded with its contemplated listing of XRP Futures pursuant to its CFTC self certification. The SEC asserted that XRP Futures are security futures, which are subject to joint SEC and CFTC jurisdiction (unlike non-security futures which are subject only to the CFTC’s exclusive jurisdiction).” The SEC also stated that Bitnomial must comply with other SEC requirements before listing XRP Futures, including registering as a national securities exchange (“NSE”) and submitting to the SEC’s jurisdiction.

Bitnomial challenged SEC’s requirement in the filing and said that to list a security futures contract based on a single underlying security, the issuer of the underlying security must register it under the Exchange Act.

Bitnomial’s lawsuit is the second one filed against the SEC this week. Crypto.com also sued the SEC on Tuesday, alleging the regulator is overstepping its jurisdiction by claiming that nearly all crypto assets are securities.

Also Read: Ripple Files Cross-Appeal Against SEC’s Revived Claims on XRP