Challenge

Security

Status

Crypto exchange, Bitnomial, filed a&nbsp;<a style="text-decoration:none" href="https://www.foxbusiness.com/markets/bitnomial-sues-sec-over-xrp-futures-challenges-agencys-continued-claim-xrp-security">lawsuit</a> against the U.S. Securities and Exchange Commission (SEC), contesting the agency's classification of XRP as a security. Bitnomial filed the suit in an Illinois federal court, claiming that the SEC has overreached its jurisdiction regarding digital assets.&nbsp;
The exchange argues that XRP is already classified as a commodity under the Commodity Futures Trading Commission (CFTC), and thus should not fall under the SEC’s regulatory umbrella.
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 “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,” the exchange stated in its filing.&nbsp;
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In August, Bitnomial received approval from the CFTC to trade crypto futures. Following this, they submitted a self-certification to list XRP futures contracts on their platform.&nbsp;
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However, the SEC intervened, claiming that these futures were securities and that Bitnomial needed to register as a national securities exchange before proceeding.
<h2 dir="ltr" id="span-span-tensions-between-the-sec-and-crypto-firms-span-span">Tensions Between the SEC and Crypto Firms</h2>
Bitnomial’s legal battle is part of a larger trend of escalating tensions between the SEC and various crypto entities. Recently, Crypto.com also&nbsp;<a style="text-decoration:none" href="https://bsc.news/post/crypto-com-takes-legal-action-against-sec-over-wells-notice">initiated legal action</a> against the SEC, claiming the agency overstepped its authority by labeling nearly all crypto transactions as securities.&nbsp;
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Crypto(.)com argues that the SEC's lack of clear guidance creates an inconsistent regulatory framework that hampers legitimate business operations.
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Ripple Labs, Binance, and Coinbase are among the prominent companies embroiled in legal disputes with the SEC.&nbsp;
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In a recent statement, Luke Hoersten, CEO of Bitnomial, expressed confidence in their case. He emphasized that the unique nature of their lawsuit could set a legal precedent regarding the regulation of crypto derivatives, particularly XRP futures contracts.
<blockquote>
 “The SEC is determind to overstep their statutory authority and classify XRP futures and other digital asset futures as securities futures,” Hoersten&nbsp;<a style="text-decoration:none" href="https://x.com/LukeHoersten/status/1844548151178371420">wrote</a> on X. “These products have oversight from the CFTC, but the SEC’s litigation keeps US traders a step behind global counterparts.”
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<h2 dir="ltr" id="span-span-sec-s-broader-enforcement-actions-span-span">SEC’s Broader Enforcement Actions</h2>
On the same day as Bitnomial's lawsuit, the SEC&nbsp;<a style="text-decoration:none" href="https://www.reuters.com/technology/us-sec-charges-cumberland-drw-acting-unregistered-dealer-crypto-markets-2024-10-10/">charged</a> 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.
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Jorge G. Tenreiro, the acting chief of the SEC's crypto assets and cyber unit, stated:
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 “The federal securities laws require all dealers in all securities to register with the Commission, and those who operate in the crypto asset markets are no exception.”&nbsp;
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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.
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Amid these developments, SEC Commissioner Mark Uyeda has publicly criticized the agency’s current approach to crypto regulation.&nbsp;
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In a candid&nbsp;<a style="text-decoration:none" href="https://x.com/RippleXrpie/status/1844393198254481708">interview</a> on Fox Business’s Mornings, he described the SEC's “policy through enforcement” as a disaster for the industry.&nbsp;
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 <blockquote class="twitter-tweet">
 🚨BREAKING: The commissioner of the SEC - Mark Uyeda says: "I think our policies and our approach over the last several years have been just really a disaster for the whole industry!" <a href="https://twitter.com/hashtag/XRP?src=hash&amp;ref_src=twsrc%5Etfw">#XRP</a> There are two options for Gary Gensler: 1. He will be fired. 2. He will resign. <a href="https://t.co/LpcnBElKfU">pic.twitter.com/LpcnBElKfU</a>— JackTheRippler ©️ (@RippleXrpie) <a href="https://twitter.com/RippleXrpie/status/1844393198254481708?ref_src=twsrc%5Etfw">October 10, 2024</a>
 </blockquote> 
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“We’ve done nothing to provide guidance on it,” Uyeda noted, highlighting the lack of clear rules that govern cryptocurrency transactions.&nbsp;

SEC Faces Legal Challenge as Bitnomial Disputes XRP Security Status

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