Bitnomial Exchange, LLC submitted On October 10, a lawsuit was filed against the U.S. Securities and Exchange Commission (SEC) and its commissioners, challenging the SEC’s assertion that XRP is a security. The complaint, filed in the U.S. District Court for the Northern District of Illinois, seeks to enforce jurisdiction over digital asset futures, which Bitnomial claims should be exclusively regulated by the Commodity Futures Trading Commission (CFTC). It seeks declaratory and injunctive relief against the authorities’ efforts. .
Bitnomical sues SEC over XRP classification
Bitnomial, a designated contract marketplace approved by the CFTC, is in the spotlight after its plan to list XRP futures was challenged by the SEC. According to the complaint, “the SEC asserts jurisdiction over products that are already regulated by and under the exclusive jurisdiction of the CFTC.” The SEC’s intervention comes after Bitnomial self-certified to the CFTC that it will list futures contracts that are scheduled to begin trading on or after August 13, 2024.
“After filing a self-certification with the CFTC and before Bitnomial listed XRP futures for trading, the SEC contacted Bitnomial to discuss the planned listing. In discussions with Bitnomial, the SEC “Alleges that Bitnomial would violate federal securities laws if Bitnomial were to proceed with the planned listing of XRP futures pursuant to the CFTC’s self-certification,” the complaint states.
In its correspondence with Bitnomial, the SEC asserted that crypto assets are investment contracts and, by extension, securities. “The SEC asserted that XRP futures are securities futures subject to the joint jurisdiction of the SEC and CFTC. ) and to comply with a number of additional SEC requirements, including the important task of registering as an SEC and filing with the SEC’s jurisdiction,” Bitnomial wrote.
The exchange emphasized that the July 13, 2023 summary judgment in the Southern District of New York by Judge Annalisa Torres rejected the SEC’s position that tokens themselves are securities in secondary market transactions, and that Objects to classification.
Bitnomial’s lawyers argue that “Bitnomial disagrees with the SEC’s view that XRP is an investment contract and therefore a security, and that XRP futures are therefore security futures.” They further argue that it is impossible to comply with the SEC’s request because it would require Bitnomial to register as a national securities exchange, a process that would impose an unreasonable regulatory burden and cost on the company. are.
Bitnomial declares to the court that XRP futures are not securities futures, and that the SEC may assert jurisdiction over it or take enforcement action related to Bitnomial’s listing, trading, purchasing, and selling of futures on its exchanges. We are asking them to refrain from taking such actions. “Bitnomial is requiring this declaration before listing the contract, contrary to the SEC’s interpretation of the law, which would expose Bitnomial to SEC enforcement,” the company wrote.
The lawsuit comes at a time when the SEC filed an appeal of Judge Torres’ final ruling on October 2nd. The SEC has not yet announced any plans for an appeal. On October 8, cryptocurrency exchange Crypto.com also filed suit with the SEC after receiving a Wells notice. Notably, Bitnomial’s complaint comes after Canary Capital filed with the SEC to launch a spot XRP exchange-traded fund (ETF) on October 8, just days after a similar filing from Bitwise. It is.
At the time of writing, XRP was trading at $0.5344.
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