Bitnomial Sues SEC Over XRP Futures, Disputes Security Classification

Bitnomial is taking the U.S. Securities and Exchange Commission to court, challenging the agency’s claim of authority over the exchange’s proposed XRP futures contract.

The lawsuit, filed in an Illinois district court, centers on whether XRP is a security. This determination has significant implications for who regulates XRP futures trading.

Bitnomial’s XRP Futures Filing Sparks SEC Scrutiny

The SEC asserts that XRP is a security, arguing that crypto asset transactions fall under federal securities laws. This stance extends to Bitnomial’s planned futures contracts, which would allow traders to bet on the price of XRP against the U.S. dollar.

Bitnomial filed for XRP futures contracts in August, following a previous legal battle between the SEC and Ripple. In that case, a federal judge ruled that XRP was not a security in certain transactions. However, the SEC maintains that XRP functions as an investment contract and thus falls under its regulatory purview.

Read also : Ripple’s Legal Battle with SEC Nears Conclusion Amid Strategic Developments

After Bitnomial submitted its XRP futures filing, the SEC informed the exchange that it considered XRP futures to be security futures, subject to the joint oversight of the SEC and the Commodity Futures Trading Commission.

Bitnomial’s Dispute Over XRP Classification

Bitnomial’s lawsuit directly challenges the SEC’s classification of XRP. The firm argues that XRP is not a security and that its proposed futures contracts should not face the additional regulatory burdens of security futures.

Bitnomial is asking the court to block the SEC from regulating its planned XRP futures contracts or taking any legal action against the exchange.

Additionally, Bitnomial CEO Luke Hoersten highlighted the broader implications of the lawsuit, stating that the court’s decision could impact how other digital assets are classified in the future.