In one week, the second crypto exchange filed a lawsuit against the SEC

What’s new? Crypto derivatives exchange Bitnomial has sued the US Securities and Exchange Commission (SEC) to challenge the regulator’s position on the XRP token with a capitalization of $304 billion from the fintech company Ripple. The SEC continues to insist that XRP is a security, although a New York court earlier rejected this position following a multi-year trial over the regulator’s lawsuit against Ripple.

Material by Fox Business

What else is known? Bitnomial is regulated by another market surveillance agency, the Commodity Futures Trading Commission (CFTC). In August this year, following the conclusion of the SEC’s dispute against Ripple over the status of XRP, the exchange applied to launch an XRP futures contract. However, the SEC contacted Bitnomial shortly after the filing and said that the new product falls under the securities category.

Officials added that XRP futures fall under the joint jurisdiction of the SEC and CFTC, and the exchange’s move to list it would be interpreted as a violation of federal securities laws. The SEC added that Bitnomial would also need to register as a national securities exchange to bring such a product to market.

Bitnomial does not agree with this position. The lawsuit notes that XRP itself is not an investment contract and, as a result, is not a security, accordingly, XRP futures cannot fall into this category.

By filing the lawsuit, Bitnomial seeks to obtain confirmation of its position, as well as an injunction prohibiting the SEC from regulating XRP futures and taking legal action against the exchange related to the offering of its products.

“Establishing this precedent is not just about XRP; it’s about all digital assets <…> Unlike other US businesses in litigation with the SEC, Bitnomial has not been accused of wrongdoing. As such, we are in a unique position to push for a court decision on the securities or commodities classification of XRP futures following the landmark determination as a non-security in the Southern District of New York case,” said Bitnomial CEO Luke Hoersten.

Last week, the SEC filed a notice of appeal in the Ripple case, signaling a willingness to challenge the court’s ruling. In response, Ripple filed a notice of cross-appeal, but neither party has disclosed the contents of the documents.

The CFTC currently oversees bitcoin and Ethereum futures contracts, the only cryptocurrencies that the SEC has recognized as non-securities. This position has allowed spot exchange-traded funds (ETFs) based on both assets to launch in the United States. However, the market is also expecting ETFs with the largest altcoins.

Applications to launch SOL ETFs were rejected by the SEC in August due to concerns over the status of the asset. This month, two investment firms — Bitwise and Canary Capital — filed documents to launch XRP ETF, and have yet to receive a response.

Bitnomial became the second crypto exchange to file a lawsuit against the SEC this week. Earlier, Crypto.com accused the regulator of exceeding its authority and violating the Administrative Procedures Act.