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Sources reveal that a digital asset derivatives exchange from Chicago has reportedly sued the U.S. Securities and Exchange Commission (SEC) about its categorization of XRP futures as “security futures.” The company is called Bitnomial, and the dispute began when the SEC suggested that XRP futures must comply with securities laws instead of commodity laws.
This lawsuit came right after Bitnomial gained the certification of its XRP U.S. Dollar Futures contract in August. Bitnomial has been working under the Commodity Futures Trading Commission (CFTC) and acquired the certification after the famous lawsuit between SEC and Ripple ended, stating if XRP can be called a security.
Bitnomial’s Listing of XRP Futures Contract
Bitnomial utilized the self-certification pathway for listing and trading XRP futures without requiring the green light directly from the CFTC. The platform stuck to commodity laws, ensuring the product was in line with regulatory checkboxes. This self-certification process enables exchanges to provide futures contracts of particular criteria without the need to look for more regulatory approvals.
However, the SEC came into the picture right when the certification was obtained. The agency alleged that XRP futures should fall under “security futures,” which would mean that they will be overseen by both the SEC and CFTC. SEC states that listing XRP futures without aligning with securities laws would go against the federal rules.
The SEC especially asked Bitnomial to register as a national securities exchange before providing XRP futures to users. Bitnomial, on the other hand, did not agree with the notion and filed a lawsuit. “Bitnomial disagrees with the SEC’s view that XRP is an investment contract and, therefore, a security and that XRP futures are thus security futures,” the company argued in its legal filing.
The CEO of Bitnomial, Luke Hoersten, discussed the gravity of this legal predicament, emphasizing that the exchange has been compliant always and this fact further solidifies their argument. The verdict from the case, he alleged, will determine how crypto derivatives like XRP futures will be tackled in the USA in future.
Industry-Wide Lawsuits with the SEC
Sources suggest that Bitnomial is not the only body with a problem against the SEC. Another market player, Crypto.com, is also fighting against the SEC in a case. It was reported that Crypto.com got sent a Wells notice from the regulator, heralding an action in the case.
The exchange reportedly replied by saying that the SEC did not have the power to categorize prime crypto components like XRP futures as securities.
It is alleged that the SEC has been exerting regulatory force on the crypto market since 2023. Huge firms like Consensys, Uniswap Labs, and OpenSea have been criticized by the SEC which has impacted leading platforms like Ripple Labs, Binance, and Coinbase with ongoing court cases.
The Ripple Labs legal battle with the SEC has proven to be one of the longest lawsuits. It has been three years since it started, and the main issue is the debate over categorizing XRP as a security.
In July 2023, Judge Analisa Torres reportedly gave a mixed verdict in the Ripple case. She stated that the sales of XRP to retail investors would not be called transactions of securities, but selling to institutional investors would be. Ripple was asked to pay $125 million to settle the charges.
Conclusion
The legal battles of the SEC continue to move ahead within the crypto industry. The categorization of XRP futures is going to be a legal and regulatory debate. Time will unravel how the court decides to pass a verdict and who will be favored in the end. However, no matter what the decision, it is definite that the ruling will decide how futures and securities will move and be classified in the future of the US crypto industry. Stay tuned to TurkishNYRadio to learn what the future holds.
