XRP is involved in new lawsuit filed by the SEC
XRP, a cryptocurrency issued by Ripple Labs, has entered into a new legal imbroglio in the United States. Only this time it didn't involve Ripple, but a company called Bitnomial.
This week, the company filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) and its five commissioners. Like the Crypto.com exchange, the agency accuses the company of overextending its jurisdiction and regulating assets that are not within its purview.
The company's case challenges the SEC's classification of several cryptocurrencies and directly cites XRP. According to Bitnominal, the classification of XRP as a security is an example of the excesses committed by the agency.
The details of the case involving XRP
Bitnominal is a Chicago-based exchange regulated by the Commodity Futures Trading Commission (CFTC). In August, the company requested authorization to offer XRP futures contracts in dollars,
This decision came after judge Analisa Torres ruled that XRP was not a security. With the decision, several exchanges that had removed the cryptocurrency relisted it.
However, the SEC warned Bitnominal shortly after the listing, stating that the listing could violate federal securities laws. According to the SEC, the company would have to register with a national securities exchange to be able to list the contracts.
However, the exchange objected to this interpretation and decided to file a lawsuit against the company. “Bitnomial disagrees with the SEC’s view that XRP is an investment contract and therefore a security.” The SEC's argument is that futures contracts are futures securities, which fall under its jurisdiction.
The company also claims that the SEC's position extends its jurisdiction to areas normally supervised by the CFTC, the body to which Bitnominal submits.
“Setting this precedent is not just about XRP, but about all digital assets,” said Bitnomial CEO Luke Hoersten.
Industry-wide implications
Hoersten added that the company, unlike others involved in legal disputes with the SEC, has maintained a clean and legally compliant record.
The case follows similar legal action by Crypto.com, which recently sued the SEC after receiving a notice from Wells indicating potential enforcement action. The company also accused the agency of exceeding its authority by classifying most cryptoassets as securities.
The SEC has also just filed a notice of appeal in the Ripple lawsuit. Meanwhile, investment firm Canary Capital has filed to launch an XRP spot ETF. This follows a similar proposal made by Bitwise just days earlier.