The ongoing battle between cryptocurrency and the U.S. Securities and Exchange Commission (SEC) has taken a new turn. Crypto derivatives exchange Bitnomial filed a lawsuit against the SEC on Thursday, challenging the agency’s claim that XRP, the world’s seventh-largest digital asset, is a security.
Bitnomial Sues SEC over XRP
This lawsuit comes just weeks after a New York federal judge ruled in favor of Ripple Labs, a blockchain payments company, stating that XRP was not a security when traded on exchanges. The SEC has appealed that decision.
The crux of Bitnomial’s lawsuit revolves around its planned XRP futures contract. The exchange, regulated by the Commodity Futures Trading Commission (CFTC), argues that the SEC is overstepping its bounds by claiming jurisdiction over XRP futures. The SEC, however, insists that because XRP is an investment contract (a security), trading XRP futures would also be considered a security.
This disagreement highlights the ongoing “turf war” between the SEC and CFTC, both vying for sole regulatory power over digital assets. Currently, the CFTC oversees futures contracts for Bitcoin and Ether, the only two cryptocurrencies the SEC has explicitly exempted from being securities.
Bitnomial is seeking a court ruling that declares XRP futures are not securities and prohibits the SEC from interfering with their product offering.
“Establishing this precedent is not just about XRP; it’s about all digital assets,” said Bitnomial CEO Luke Hoersten. “Unlike others in litigation with the SEC, Bitnomial hasn’t been accused of wrongdoing. We’re uniquely positioned to push for a court decision on the classification of XRP futures, following the Ripple case.”
This lawsuit adds to the growing tension between the crypto industry and the SEC. Earlier this week, digital asset exchange Crypto.com also sued the SEC, accusing it of exceeding its authority by labeling most cryptocurrencies as securities.
