Digital asset derivatives exchange Bitnomial is taking a stand against the U.S. Securities and Exchange Commission (SEC). The company has filed a lawsuit claiming the SEC is overstepping its authority by labeling XRP as a security.
According to the announcement post, Bitnomial aims to launch XRP US Dollar Futures contracts, which it believes fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), not the SEC.
In a statement, Bitnomial said it is a CFTC-regulated Venue. The firm self-certified its XRP Futures on August 9, 2024. Within days, the SEC had waded in, arguing the XRP Futures are security futures and that it has jurisdiction over them.
The lawsuit has come in the wake of a recent ruling by the Southern District of New York that said XRP was not inherently a security. Despite this, the SEC has insisted on sticking to its definition of XRP. Bitnomial firmly believes such a stance by the commission prevents it from legally listing XRP Futures.
Bitnomial seeks court ruling on XRP futures classification
In the complaint, Bitnomial asks the court to “declare that XRP Futures are not security futures.” SEC’s accusations prevent innovation and development within the future market innovations. Additionally, it can also prevent markets beyond its regulatory purview. Bitnomial has not yet listed XRP Futures, and the firm remains scatheless by any accusation of wrongdoing so far from the SEC.
The case tends to underscore the very urgent need for clarity over the regulatory jurisdiction of digital assets. Bitnomial argues this approach by the SEC might stifle innovation and disrupt the digital asset derivatives market.
They further argue that, unless the court intervenes, they otherwise face the impossible decision of either abandoning plans for the XRP futures or listing, subject to possible penalties against the SEC’s law interpretation. The ruling in this case decision has the potential to alter the outlook of the US digital asset regulation.
