Crypto exchange Bitnomial has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) over its decision to classify XRP as a security. The suit was filed in an Illinois federal court, claiming the SEC has overstepped its jurisdiction regarding digital assets.

Bitnomial vs. SEC

Bitnomial argues that XRP is already classified as a commodity under the Commodity Futures Trading Commission (CFTC) and thus should not fall under the SEC's regulatory umbrella.

"Bitnomial disagrees with the SEC's view that XRP is an investment contract and, therefore, a security, and that XRP Futures are thus security futures," the company stated in its lawsuit.

Rising Tensions Between SEC and Crypto Firms

Bitnomial's legal battle is part of a larger trend of escalating tensions between the SEC and various crypto entities. Recently, Crypto.com also initiated legal action against the SEC, claiming the agency overstepped its authority by labeling nearly all crypto transactions as securities. Ripple Labs, Binance, and Coinbase are also involved in legal disputes with the SEC.

Luke Hoersten, CEO of Bitnomial, expressed confidence in their case, emphasizing that the uniqueness of their lawsuit could set a legal precedent regarding the regulation of crypto derivatives, particularly XRP futures.

SEC's Broader Actions

On the same day as Bitnomial's lawsuit, the SEC charged Cumberland with operating as an unregistered dealer since March 2018, claiming it engaged in buying and selling crypto assets deemed securities without proper registration.

Jorge G. Tenreiro, the acting chief of the SEC's crypto assets and cyber unit, stated that federal securities laws require all dealers in all securities to register with the Commission, and those who operate in the crypto asset markets are no exception.

The increasing legal friction between crypto companies and the SEC highlights the need for clearer and more consistent rules in the digital asset market. The outcome of Bitnomial's case could significantly influence future regulatory frameworks for crypto derivatives.