- Bitnomial sued SEC over oversight of XRP Futures classification
- The price of XRP remained stable amid the SEC’s intensified scrutiny of major crypto entities
Bitnomial, a cryptocurrency derivatives exchange, has taken legal action against the US Securities and Exchange Commission (SEC) over its regulatory authority over Ripple’s [XRP] futures contracts.
The exchange disputed the SEC’s position that XRP Futures fall under ‘Security Futures’, which brings them within the regulatory scope.
Ripple Labs vs. SEC: A Brief History
Needless to say, the ongoing legal conflict between Ripple and the SEC over the status of XRP has been a long-running war that started in 2020.
Notably, Judge Analisa Torres recently ruled that XRP itself does not meet all the criteria of the SEC’s Howey Test. This meant that secondary sales of XRP are not considered unregistered securities.
However, on October 2, the SEC escalated the matter by filing an appeal, aiming to challenge Judge Torres’ decision and seek reversal of this critical ruling.
The present
Bitnomial in being recent lawsuit claims that the SEC contacted the exchange shortly after the filing claiming that XRP Futures contracts fall under “Security Futures” and are thus subject to joint supervision by the SEC and CFTC.
The SEC warned Bitnomial that continuing to list XRP Futures without adhering to additional regulatory obligations would violate federal securities laws.
Additionally, the SEC recommended that Bitnomial would be required to register as a national securities exchange to meet compliance requirements before marketing XRP futures.
The lawsuit stated:
Source: www.bitnomial.com
Managers weigh in…
However, Bitnomial’s legal action goes beyond seeking clarity on the classification of XRP Futures. The exchange is also seeking an injunction to prevent the SEC from exercising regulatory control over XRP Futures.
Therefore, Bitnomial is seeking a ruling that would not only confirm that XRP Futures are not “Security Futures,” but would also block the SEC from taking enforcement action against the exchange regarding its planned XRP Futures offering.
Luke Hoersten, CEO of Bitnomial, said the same about this FOX business,
“Setting this precedent isn’t just about XRP; it’s about all digital assets. Unlike other US companies litigating before the SEC, Bitnomial has not been accused of wrongdoing.”
He added:
“As such, we are uniquely positioned to push for a judicial decision on the classification of XRP futures for securities or commodities, following the landmark non-security determination in the Southern District of New York case.”
Impact on the price of XRP
Despite continued regulatory scrutiny, the price of XRP has remained resilient, gaining 1.55% in the past 24 hours. At the time of writing, the price stood at $0.5357 CoinMarketCap.
Unfortunately, since the appointment of Gary Gensler in 2021, the SEC has intensified its focus on prominent crypto entities. In doing so, it has taken legal action against companies like Coinbase, Ripple, Uniswap and many more.
Recently, Crypto.com announced that they too had filed a lawsuit against the SEC after receiving a Wells Notice – an indication of potential regulatory charges.
These actions highlight the ongoing conflict between the SEC and the cryptocurrency industry, which is fighting to maintain its presence in the market despite mounting regulatory challenges.