XRP Crypto Futures Controversy: Bitnomial Sues SEC for Clarity

XRP Crypto- Bitnomial Challenges SEC’s Claim on XRP Status

XRP Crypto– Crypto exchange Bitnomial has initiated a lawsuit against the United States Securities and Exchange Commission (SEC) and its five commissioners, challenging the agency’s assertion that XRP Crypto should be classified as a security. This legal action highlights ongoing tensions between cryptocurrency exchanges and regulatory bodies regarding the jurisdiction over digital assets.

Overstepping Jurisdiction Claims

In a filing submitted to an Illinois federal court on October 10, Bitnomial contended that XRP is already regulated as a commodity, which falls under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). The exchange stated, The SEC asserts jurisdiction over a product that is already regulated by and subject to the exclusive jurisdiction of the Commodity Futures Trading Commission. Bitnomial further argued that this overreach by the SEC unnecessarily complicates the regulatory landscape for their operations.

In August, Bitnomial, which gained CFTC approval in 2020 to trade crypto futures, submitted a self-certification to list XRP Crypto futures contracts. However, after the SEC intervened, the agency claimed that XRP futures should be classified as securities, thus requiring Bitnomial to register as a securities exchange before proceeding with the listing.

Compliance Challenges for Bitnomial

Bitnomial has asserted that it cannot possibly comply with the SEC’s legal requirements for listing XRP futures. The exchange explained that the token’s issuer, Ripple Labs, has yet to register XRP Crypto as a security. The SEC has effectively blocked Bitnomial from listing XRP futures, the exchange claimed, emphasizing the complications that arise from the current regulatory stance.

Additionally, Bitnomial pointed to a ruling in the SEC’s ongoing lawsuit against Ripple Labs, which rejected the SEC’s position that XRP traded on secondary markets should be considered a security. The SEC announced on October 2 that it intends to appeal this decision, further intensifying the legal dispute.

Seeking Clarity and Protection

In its lawsuit, Bitnomial is requesting a declaratory judgment stating that XRP Crypto futures should not be classified as securities. Furthermore, the exchange is seeking an injunction to prevent the SEC from claiming jurisdiction over these derivatives products or taking enforcement actions against Bitnomial for listing them.

This lawsuit comes amid a growing trend of legal challenges faced by cryptocurrency firms. Earlier in October, a Texas-based crypto startup filed a brief in an ongoing case against the SEC, requesting a preliminary injunction to prevent enforcement actions related to its planned exchange listing. Additionally, on October 8, global digital asset exchange Crypto.com filed its own lawsuit against the SEC after receiving a Wells notice indicating potential enforcement actions against the firm.

Bitnomial’s legal challenge reflects the ongoing struggle between cryptocurrency exchanges and regulatory authorities as they navigate the complexities of compliance and the future of digital asset trading.

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