Crypto Exchange Bitnomial Sues SEC Over XRP Regulation Dispute

The Chicago-based crypto exchange Bitnomial has filed a lawsuit against the United States Securities and Exchange Commission (SEC) and its five commissioners, accusing the agency of exceeding its regulatory reach.

The case focuses on the SEC’s decision to label XRP as a security. The SEC argues that it meets the definition of an investment contract under the Securities Exchange Act.

Bitnomial Seeks Approval to List XRP/USD Futures

Bitnomial had earlier requested approval to list XRP/USD futures in August. The request came after a federal court ruled that XRP was not a security in the financial watchdog’s lawsuit against Ripple.

The SEC warned the exchange that proceeding with the listing could breach federal securities laws unless the company adhered to additional regulatory requirements, such as registering as a national securities exchange.

According to the lawsuit, the financial watchdog told the exchange to follow securities laws to offer XRP futures, as they would be considered “security futures.”

However, Bitnomial disagrees with the SEC’s view. The exchange, regulated by the Commodity Futures Trading Commission (CFTC), claims that the SEC is going beyond its power and getting involved in areas the CFTC should oversee.

Bitnomial Plans to Block SEC’s Claim

Bitnomial is seeking a court ruling that XRP futures should not be classified as security futures, shielding the company from potential SEC enforcement actions. Additionally, the exchange aims to stop the SEC from claiming jurisdiction over XRP futures or initiating any enforcement action regarding their listing.

In an interview, the exchange’s CEO, Luke Hoersten, emphasized that the case affects all digital assets, not just XRP. He noted that the exchange has maintained a clean compliance record, which gives the company a unique opportunity to seek a judicial ruling on whether XRP futures should be classified as securities or commodities.

Bitnomial’s lawsuit follows a similar action by the crypto exchange Crypto.com earlier this week, which also filed a lawsuit against the SEC after receiving a Wells notice suggesting possible enforcement action. The exchange also claimed that the SEC is overstepping its authority by classifying most crypto assets as securities.