Bitnomial, a crypto exchange, has filed a lawsuit against the United States Securities and Exchange Commission and its five commissioners. The company accuses the agency of wrongfully extending its authority over digital assets by claiming that XRP is a security.
Bitnomial filed the lawsuit in an Illinois federal court on Oct. 10, arguing that XRP is already regulated as a commodity and is under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC). The SEC’s assertion of jurisdiction over XRP duplicates and compounds the regulatory burden on Bitnomial, according to the exchange.
In August, Bitnomial, which was approved by the CFTC to trade crypto futures in 2020, filed a self-certification with the CFTC to list XRP futures contracts on its exchange. However, the SEC contacted Bitnomial and claimed that XRP futures are securities, requiring the exchange to register as a securities exchange before listing the products.
Bitnomial stated that it is unable to comply with the legal requirements to list XRP futures because the issuer of the token, Ripple Labs, has not registered it as a security. The company claimed that the SEC’s actions have effectively blocked Bitnomial from listing XRP futures.
Bitnomial also cited a ruling in the SEC’s lawsuit against Ripple Labs, which rejected the regulator’s view that XRP traded on secondary markets is a security. On Oct. 2, the SEC announced that it would appeal this decision, seeking to overturn Judge Analisa Torres’ ruling.
The company is seeking a declaratory judgment that XRP futures are not securities and an injunction to prevent the SEC from asserting jurisdiction over the derivatives products or pursuing enforcement action against Bitnomial for listing them.
Bitnomial’s lawsuit comes amidst a growing legal battle between crypto companies and the SEC. Other companies, such as Crypto.com and Canary Capital, have also taken legal action against the SEC in recent weeks. Additionally, there have been developments related to the investment firm Canary Capital’s filing with the SEC to launch a spot XRP exchange-traded fund (ETF), as well as news regarding Plus Token’s $1.3B ETH and the arrest of the ‘Crypto King.’