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Crypto derivatives exchange Bitnomial has sued the US SEC, claiming it has overreached its jurisdiction with the latest attempt to prevent the listing and trading of XRP futures.
According to the filing, Bitnomial claimed that XRP futures were a contract under the jurisdiction of the Commodities Futures Trading Commission. However, the US SEC claims that the futures product is a securities product and requires joint approval from it and the CFTC.
Bitnomial stated in the lawsuit that the SEC argued that listing the XRP futures contract violated federal securities law. The SEC also required that it meet certain requirements before listing, including registering as a securities exchange.
For context, Bitnomial revealed it filed for an XRP US Dollars Futures product with the CFTC in August after a court ruled that XRP was not a security. As a result, offering a futures contract tied to the XRPL native token does not constitute an investment contract.
Bitnomial Argues XRP is Not a Security
According to the filing, the derivatives exchange argues that XRP is not a security and that offering a futures contract that tracks the asset’s performance does not constitute an investment contract.
Bitnomial cited the court ruling rejecting the regulator’s views that XRP was a security. Notably, a federal court ruled in July 2023 that XRP was not a security and that the sales of XRP on an exchange or by executives do not constitute an investment contract.
Meanwhile, Bitnomial is seeking that the court declare XRP futures are not a security contract. The exchange also asked that a legal injunction preventing the SEC from taking any legal action against it should it list the product be issued.
It bears mentioning that the SEC has filed a notice of appeal, seeking to contend with Judge Analisa Torres’s August 7 ruling. However, the regulator has not disclosed the scope of the appeal.
Lawsuits Involving the SEC Piles On
The SEC has recently been involved in several legal brawls with crypto firms. The regulator is either suing a company or getting sued. For instance, the SEC sued market maker Cumberland on Thursday, claiming it was operating as an unregistered dealer.
Furthermore, Crypto.com sued the SEC on Tuesday after it received a Wells Notice from the regulator. The exchange claimed that the Wall Street securities top dog was overstepping its jurisdiction by regulating the sector.
Notably, Ripple also filed a notice of counter-appeal on October 10. Per the filing, the firm cross-appealed the SEC’s October 2 appeal and the August 7 ruling.