Crypto exchange Bitnomial has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), contesting the classification of XRP as a security. Bitnomial argues that the SEC is overstepping its jurisdiction regarding digital assets.

Bitnomial's Lawsuit Against SEC

Bitnomial filed the lawsuit in an Illinois federal court, claiming that XRP is already classified as a commodity under the Commodity Futures Trading Commission (CFTC) and thus should not fall under SEC regulation. In August, Bitnomial received approval from the CFTC to trade crypto futures and submitted a self-certification to list XRP futures contracts on their platform. However, the SEC intervened, claiming these futures were securities and that Bitnomial needed to register as a national securities exchange. Quote: “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 said 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 among the prominent companies embroiled in legal disputes with the SEC. In a recent statement, Luke Hoersten, CEO of Bitnomial, expressed confidence in their case, emphasizing that the unique nature of their lawsuit could set a legal precedent regarding the regulation of crypto derivatives, particularly XRP futures contracts. Quote: “The SEC is determined to overstep their statutory authority and classify XRP futures and other digital asset futures as securities futures,” Hoersten wrote on X.

SEC's Broader Enforcement Actions

On the same day as Bitnomial's lawsuit, the SEC charged Cumberland with operating as an unregistered dealer since March 2018. The agency claims that Cumberland has engaged in buying and selling crypto assets deemed securities without proper registration. In a statement to Reuters, Cumberland's spokesperson criticized the charges as 'incredibly frustrating and disappointing,' arguing that the SEC's regulatory framework lacks clarity and consistency. Amid these developments, SEC Commissioner Mark Uyeda has publicly criticized the agency’s current approach to crypto regulation. In a candid interview on Fox Business, he described the SEC's 'policy through enforcement' as a disaster for the industry. Quote: “I think our policies and our approach over the last several years have been just really a disaster for the whole industry!”

Bitnomial's lawsuit against the SEC highlights the ongoing struggle between crypto firms and regulators. These developments underscore the need for clearer regulation and consistency in the legal oversight of digital assets.