Brad Garlinghouse Takes Aim at SEC Overreach as Bitnomial Fights for XRP Futures

Ripple’s CEO, Brad Garlinghouse, has voiced his support for Bitnomial amid the recent ongoing legal conflict between the U.S. Securities and Exchange Commission (SEC) and cryptocurrency firms. 

The exchange has filed a preemptive lawsuit against the SEC in the U.S. District Court for the Northern District of Illinois, challenging the regulator’s authority over XRP futures. This move comes amid heightened tensions between the crypto industry and the SEC over the classification and regulation of digital assets.

Bitnomial Exchange, LLC has filed suit against SEC to prevent them overreaching their statutory authority and asserting joint jurisdiction over Bitnomial’s $XRP futures contracts, which are under the sole jurisdiction of the @CFTC.

Read about the complaint here:…

— Bitnomial (@Bitnomial) October 11, 2024

Bitnomial’s Lawsuit Against the SEC

Bitnomial, a platform offering futures contracts for digital assets, is explicitly challenging the SEC’s jurisdiction over XRP futures contracts. The exchange claims it has already self-certified its XRP-based derivatives offering with the U.S. Commodity Futures Trading Commission (CFTC), the federal agency traditionally responsible for regulating commodity futures in the U.S. 

Bitnomial is now getting a court order to declare that XRP contracts should not be referred to as security futures and are, therefore, not regulated by the SEC.

The legal action addresses possible enforcement issues between the SEC and the CFTC. Currently, the SEC has expressed concern over the security status of XRP while the CFTC addresses the regulation of commodities and their derivatives, including futures. Bitnomial also wants to avoid the SEC extending its control over the subsequent contracts for XRP or initiating enforcement actions on offering the contracts.

Ripple’s Response to the SEC

Brad Garlinghouse, CEO of Ripple, publicly supported Bitnomial’s legal challenge and criticized the SEC’s continued efforts to regulate XRP as a security. 

Garlinghouse, who has been actively involved in Ripple’s legal battle with the SEC, referred to the regulator on social media as a “renegade agency,” suggesting that the SEC is overstepping its regulatory authority. 

A new low for a renegade agency many thought couldn't sink further.

The SEC now believes it can operate above the law, ignoring a Court's ruling that XRP isn't a security.

Team Ripple will be watching closely and weighing our own options to hold the SEC accountable. https://t.co/9yMWsNHRde

— Brad Garlinghouse (@bgarlinghouse) October 11, 2024

He further emphasized that Ripple would closely monitor the developments in the Bitnomial case as it seeks to hold the SEC accountable for its actions.

Garlinghouse’s criticism comes as Ripple is appealing a U.S. court ruling that ordered the company to pay a $125 million fine. Despite a previous court decision clarifying that XRP is not a security, the SEC continues to push for its classification as such, appealing the August 2024 ruling that found in Ripple’s favor. The legal battle remains unresolved as both sides continue their respective appeals.

Broader Implications for XRP and Futures Regulation

The case lodged by Bitnomial may have implications in determining the rules for the regulation of digital asset futures in the United States of America especially on jurisdictional issue between SEC and CFTC. There will be other related firms, which offer similar products, eyeing on the Bitnomial’s case attempting to know how to avoid such legal complications.

Given the weight of these circumstances, the results of the Bitnomial case against the SEC can determine the further fate of the legislation of the United States for the sale and circulation of digital assets for companies involved in XRP and other digital assets.