In less than a week, 2 crypto exchanges have filed lawsuits against the US SEC, with Bitnomial joining Crypto.com’s latest move
Cryptocurrency exchange Bitnomial has filed a Federal Court action against the United States Securities and Exchange Commission (SEC) and five commissioners. According to the Illinois-based trading platform, the agency is “overextending its jurisdiction over digital assets” by claiming that XRP is a security.
Bitnomial Accused SEC of Crypto Overreach
In the filing, Bitnomial noted that the SEC categorized its yet-to-be-listed XRP Futures product as security. The Commission stated that the crypto derivatives exchange violated federal securities laws regarding the XRP Futures offering. This allegation suggests that the SEC still views XRP as an investment contract and, therefore, a security.
Furthermore, Bitnomial explained that the agency required it to comply with additional requirements for XRP Futures. It is worth noting that the product already attained a self-certification from the CFTC. In the filing, one of the requirements includes the “significant task” of registering as a national securities exchange under SEC jurisdiction.
In the SEC’s opinion, the regulation of the Bitnomial XRP Futures product involves both the Gary Gensler-led Commission and the Commodity Futures Trading Commission (CFTC). On this premise, the agency hindered the listing of the XRP Futures product. Bitnomial has stated that it is not the issuer of XRP and, therefore, does not have the right to register the cryptocurrency.
“As the SEC knows, XRP, which is the underlying security in the SEC’s view, is not registered,” the filing said. “Further, Bitnomial is not the issuer of XRP and, even if it wanted to, does not have the power to register XRP.”
Beyond Bitnomial, Crypto.com Also Sues US SEC
Bitnomial’s filing is one of the recent counter-legal actions the SEC has received these past few months.
Like the unsuccessful ConsenSys lawsuit from a few months ago, Crypto.com filed a lawsuit against the US SEC on October 8. Earlier, the regulator sent a Wells Notice to the crypto exchange, suggesting a likely enforcement action.
Crypto.com believes that the SEC has embarked on a regulation-by-enforcement campaign instead of providing clear regulatory guidelines. Like Bitnomial, Crypto.com strongly opines that the agency has expanded its jurisdiction beyond what federal statutes allow.
It is clear that many crypto firms are growing tired of the SEC’s regulation. The outcome of the SEC vs. Crypto.com suit is still pending.
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