Bitnomial cryptocurrency exchange has filed suit with the US SEC (Securities and Exchange Commission) in response to the regulator’s plan to assert jurisdiction over the exchange’s planned XRP futures product. The SEC recently issued a Wells Notice to exchanges indicating potential litigation, as XRP futures products are securities and must be registered with the Commission. Bitnomial claims that XRP futures are supervised by the Commodity Futures Trading Commission and is seeking a court ruling that would reduce the SEC’s regulatory burden.
US-based cryptocurrency exchange Bitnomial sues the Securities and Exchange Commission (SEC) over the regulator’s claims of authority over the XRP USD futures contract (XRP futures), which is still in the process of being introduced on exchanges. did. This reactionary lawsuit follows a Wells notice from the Commission claiming that the planned XRP futures product is a securities product and that Bitnomial must register as a securities exchange with the agency before offering the product. It is something.
Bitnomial seeks court ruling to protect XRP futures from SEC
In the lawsuit, dated October 10, 2024, Bitnomial alleges that the SEC continues its efforts to “extend its jurisdiction over digital assets unduly,” and in this case that the XRP futures product “exceeds its statutory authority.” “There are many cases in which the United States is facing a crisis,” he said, highlighting the main concerns of the case. . ”
Bitnomial said SEC staff contacted it on August 12 to discuss its plans to list XRP futures. The European Commission was scheduled to notify exchanges late on August 21st that the planned XRP futures contract would be a “securities futures contract” subject to federal securities regulations.
The Commission’s granting of security status to XRP futures contracts is based on the Commission’s assertion that asset XRP is an investment contract and automatically becomes a security under the Exchange Act. As a result, regulators expect Bitnomial to be “registered as a national securities exchange” before listing XRP futures.
Meanwhile, Bitnomial pointed out that the SEC’s argument that XRP and other projects are securities is deeply flawed. Judge Annalisa Torres of the Southern District of New York ruled that only sales of XRP to institutional investors, not programmatic sales, constitute unregistered securities.
Therefore, Bitnomial argues that the SEC’s authority is limited and does not extend to XRP futures. According to the filing, courtesy of the New York District Court, the product will not meet the definition of a “securities futures” unless the Commission certifies that the underlying XRP is a security and the SEC no longer has that status. Not satisfied.
“XRP, the digital token and underlying product here, is not itself a security. Furthermore, XRP exchanged anonymously on the secondary market is not a security,” Bitnomial said.
“Thus, XRP futures that are physically settled through anonymous exchanges of XRP may not be security futures.”
Therefore, Bitnomial is asking the court to declare that XRP futures contracts are not securities futures under SEC law. Additionally, Bitnomial is seeking “injunctive relief” to prevent regulators from asserting jurisdiction over XRP futures or initiating investigations or enforcement into the activities of Bitnomial or its partners involving products on its platform. It seems so.
Finally, the exchanges are asking the court to order the SEC to pay all costs and attorneys’ fees associated with the lawsuit.
