Chicago-based digital asset derivatives exchange, Bitnomial, has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), challenging the agency’s claim that XRP futures should be classified as “security futures.” The legal dispute arose after Bitnomial self-certified its XRP U.S. Dollar Futures contract in August, following the conclusion of the SEC vs. Ripple lawsuit, which focused on whether XRP qualifies as a security.
Bitnomial’s XRP Futures Certification
Bitnomial’s self-certification allowed the exchange to list the XRP futures contract without explicit approval from the Commodity Futures Trading Commission (CFTC), as the product was considered compliant with commodity regulations. However, the SEC intervened, asserting that XRP futures should fall under security futures regulation, which requires oversight from both the SEC and CFTC.
The SEC warned Bitnomial that proceeding with the product listing without registering as a national securities exchange would violate federal securities laws. In response, Bitnomial filed a lawsuit, arguing that XRP should not be classified as a security, which in turn challenges the SEC’s jurisdiction over its XRP futures contracts.
Bitnomial’s Legal Position
In its legal filing, Bitnomial stated: “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 exchange’s CEO, Luke Hoersten, emphasized the importance of the lawsuit, noting that a favorable court ruling could set a significant precedent for the regulation of crypto derivatives like XRP futures in the U.S.
Crypto.com’s Legal Action Against the SEC
Bitnomial’s lawsuit follows a similar legal move by Crypto.com, which also sued the SEC after receiving a Wells notice—a formal warning of potential enforcement actions. Crypto.com accused the SEC of overreaching by classifying most crypto assets as securities.
Since 2023, the SEC has increased its enforcement actions across the crypto industry, targeting companies such as Consensys, Uniswap Labs, and OpenSea. Major players like Ripple Labs, Binance, and Coinbase are also facing ongoing legal disputes with the regulator.
In Ripple’s case, Judge Analisa Torres ruled in July that the company’s XRP sales to retail investors did not qualify as securities transactions, although institutional sales did. Despite being ordered to pay $125 million, Ripple has appealed aspects of the decision, extending the legal battle.
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