Crypto exchange Bitnomial has sued the United States Securities and Exchange Commission and its five commissioners, accusing the agency of “overextending its jurisdiction over digital assets” by claiming that XRP is a security.
Bitnomial claimed in its Oct. 10 suit filed in an Illinois federal court that XRP (XRP) is already regulated as a commodity, and the SEC “asserts jurisdiction over a product that is already regulated by and subject to the exclusive jurisdiction of the Commodity Futures Trading Commission.”
“In doing so, the SEC inappropriately duplicates and compounds the regulatory burden on Bitnomial,” the exchange added.
In August, Bitnomial — which the CFTC approved to trade crypto futures in 2020 — filed a self-certification with the CFTC to list XRP futures contracts on its exchange.
The exchange claimed the SEC contacted it and asserted that XRP futures are securities and required Bitnomial to register as a securities exchange before listing the products.
Bitnomial said it “cannot possibly comply” with the legal requirements to list XRP futures as the issuer of the token — Ripple Labs — must register it as a security, which it hasn’t.
“The SEC has effectively blocked Bitnomial from listing XRP futures,” it claimed.
An excerpt from Bitnomial’s filing claims the SEC “overextended” its authority. Source: PACER
Bitnomial also argued a ruling in the SEC’s lawsuit against Ripple Labs rejected the regulator’s view that XRP traded on secondary markets is a security.
On Oct. 2, the SEC said it would appeal the decision, seeking to overturn Judge Analisa Torres’ ruling.
Bitnomial is seeking a declaratory judgment that XRP futures are not securities and an injunction preventing the SEC from asserting jurisdiction over the derivatives products or pursuing enforcement action against the company for listing them.
Earlier in October, a Texan crypto startup filed a brief in its ongoing lawsuit with the regulator seeking a preliminary injunction to prevent the SEC from taking enforcement action should it list crypto on its planned exchange.
On Oct. 8, global digital asset exchange Crypto.com also sued the SEC after it received a Wells notice — a document stating that the SEC could bring enforcement action against the firm.
Bitnomial’s suit comes as investment firm Canary Capital filed with the SEC on Oct. 8 to launch a spot XRP exchange-traded fund (ETF), days after a similar bid from Bitwise.
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