Bitnomial drops SEC lawsuit ahead of XRP futures launch in the US

Crypto exchange Bitnomial has voluntarily dismissed its lawsuit against the US Securities and Exchange Commission ahead of launching its Ripple XRP futures in the United States.

The Chicago-based firm said in a March 19 statement to X that its XRP (XRP) futures are regulated by the US Commodity Futures Trading Commission and will be available from March 20 for current users.

“Bitnomial is launching the first-ever CFTC-regulated XRP futures in the US — physically settled for real market impact,” Bitnomial said.

“Plus, we’ve voluntarily dismissed our case against the SEC as regulatory clarity improves,” it added.

Source: Bitnomial 

The exchange filed a self-certification with the CFTC to list XRP futures contracts on its exchange in August 2024. However, the SEC blocked the move, pushing for Bitnomial to register as a securities exchange before it could list the futures.

Bitnomial sued the SEC and its five commissioners on Oct. 10, accusing the agency of overextending its jurisdiction by claiming that XRP is a security.

Bitnomial’s XRP futures launch follows Ripple CEO Brad Garlinghouse’s March 19 announcement the SEC opted out of continuing an appeal against a ruling that found XRP is only a security for retail sales.

A July 13, 2023 judgment from Judge Analisa Torres deemed XRP is not a security for retail sales; however, she opined it was when sold to institutional investors, as it met the conditions set in the Howey test. The SEC was appealing Torres’s decision.

The SEC initially launched legal action against Ripple Labs in December 2020, accusing the firm of illegally selling its token as an unregistered security.

Related: Vermont follows SEC’s lead, drops staking legal action against Coinbase

Under the Trump administration, the SEC has slowly been walking back its hardline stance toward crypto forged under former SEC Chair Gary Gensler’s reign, dismissing a growing number of enforcement actions against crypto firms.

The agency’s acting chair, Mark Uyeda, who took the reins after Gensler resigned on Jan. 20, flagged plans on March 17 to scrap a rule proposed under the Biden administration that would tighten crypto custody standards for investment advisers.

Uyeda also said in a March 10 speech that he had asked SEC staff for options to abandon part of proposed changes that would expand regulation of alternative trading systems to include crypto firms, requiring them to register as exchanges. 

Magazine: SEC’s U-turn on crypto leaves key questions unanswered