SEC Commissioner Mark Ueda talks about the agency's handling of cryptocurrencies on “Morning with Maria.”
According to an investigation by FOX Business, the Securities and Exchange Commission still firmly believes that the cryptocurrency XRP is a security.
The revelation came after a lawsuit filed Thursday night in Illinois District Court by crypto derivatives exchange Bitnomial. Bitnomial has sued a top Wall Street cop, claiming jurisdiction over futures contracts that are supposed to track the price of XRP, the seventh-largest digital currency. Assets by market capitalization.
Bitnomial, which is regulated by the SEC's sister agency the Commodity Futures Trading Commission, filed for XRP USD futures contracts in August following the conclusion of the SEC's lawsuit against blockchain payments company Ripple, where a federal judge ruled The court ruled against the SEC's claims to use XRP. is security.
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According to Bitnomial's complaint, the SEC contacted the exchange shortly after filing the lawsuit, stating that XRP futures are “securities futures” subject to joint jurisdiction between the SEC and the CFTC, and that Bitnomial's listing would violate federal securities laws. I argued that it would be. The SEC also said Bitnomial must comply with additional requirements before listing XRP futures, including registration as a national securities exchange.
“The SEC takes the view that the underlying XRP is an investment contract and, therefore, transactions in XRP constitute securities under the Securities and Exchange Act,” the complaint states. “Bitnomial disagrees with the SEC’s view that XRP is an investment contract and therefore a security, and therefore XRP futures are security futures.”
There was no immediate comment from the SEC.
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The SEC's assertion that XRP futures are securities futures will further escalate the turf war between the SEC and CFTC, which are currently vying for sole jurisdiction over digital assets. Bitnomial believes its lawsuit will help provide some clarity on how crypto derivatives should be regulated and which regulators should oversee them.
The CFTC currently oversees futures contracts for Bitcoin and Ether, the only two digital assets that the SEC considers to be non-securities.
In addition to seeking a judge's declaration that XRP futures are not securities futures, Bitnomial is also concerned that the SEC may assert authority over XRP futures and take legal action against Bitnomial in connection with its product offering. It asks the court to issue an order prohibiting it.
“Establishing this precedent is not just an issue for XRP; it is an issue for all digital assets,” Bitnomial CEO Luke Hoersten told FOX Business.
“Unlike other US companies in litigation with the SEC, Bitnomial has not been accused of wrongdoing,” he said. “As such, following the landmark non-security ruling in the Southern District of New York, we are uniquely positioned to seek a court ruling regarding the classification of XRP futures as a security or commodity.”
Bitnomial's lawsuit returns the hotly contested question of whether XRP is a security back to district court, potentially sending the issue to the Second Circuit.
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SEC Commissioner Mark Uyeda said the SEC's approach to cryptocurrencies is “a real disaster for the entire industry.” (Photo illustration: Omar Marques/SOPA Images/LightRocket, Getty Images / Getty Images)
The SEC filed a notice of appeal in the Ripple case last week, indicating it will likely challenge a New York federal judge's decision that exchange-traded XRP is not a security. Ripple filed a notice of cross-appeal on Thursday, but neither company has disclosed details of the appeal.
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Bitnomial's lawsuit is the second filed against the SEC this week. Digital asset exchange Crypto.com announced Tuesday that regulators will sue the agency for exceeding its jurisdiction by claiming that nearly all crypto assets are securities.
