The SEC Targets XRP Again, Causing Crypto Market Volatility
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min read ▪ by
Arm wrestling between the SEC and crypto companies seems endless. Today, Ripple’s XRP once again finds itself at the heart of hostilities. Bitnomial, a Chicago-based cryptocurrency exchange, accuses the SEC of overextending its jurisdiction by requiring increased compliance for its XRP futures contracts. This case reignites tensions around XRP’s status as a security, and the crypto sector is beginning to worry about broader repercussions for all digital assets.
Bitnomial challenges the SEC: a jurisdiction conflict
Bitnomial, under the regulation of the Commodity Futures Trading Commission (CFTC), recently sought permission to launch XRP futures contracts backed by the dollar.
However, this initiative quickly drew the SEC’s attention. The agency warned Bitnomial that without registration in compliance with its requirements, offering these contracts could violate federal securities laws. Bitnomial contests this position, arguing that the SEC is overstepping its rights by classifying crypto XRP as a security. However, Ripple achieved a victory.
Behind this confrontation is a question of jurisdiction. According to Bitnomial, the CFTC is supposed to oversee futures contracts, while the SEC regulates securities.
By qualifying XRP as an “investment contract,” the SEC attempts to bring these futures under its own control, a step towards more aggressive regulation of the entire sector.
For Bitnomial, this move by the SEC amounts to an attempt at dominance, not only over XRP but potentially over all digital assets.
In response, Bitnomial filed a complaint, hoping to obtain a judicial declaration that would redefine the classification of these contracts.
If the exchange succeeds, it could set a strong legal precedent, not only for XRP but for all other crypto assets likely to suffer the same fate. Thus, this case takes on a symbolic dimension, a fight for the sector’s autonomy against increasingly intrusive regulation.
The crypto sector faces new uncertainty
This dispute is not limited to XRP. In fact, the potential consequences for the entire sector are profound.
If the SEC succeeds in having XRP recognized as a security in this context, it would pave the way for similar regulations on other cryptos, a worrying prospect for investors and market players.
Already, companies like Crypto.com have also filed lawsuits against the SEC, denouncing what they see as an overly broad and unfounded approach by the agency.
The impact of this case is felt in the current atmosphere in the crypto market. Investors, worried about these repeated legal battles, are beginning to lose confidence, and selling movements are accelerating.
Regulatory uncertainty sows doubt about the robustness of crypto investments, leading to increased volatility. The destabilization of XRP spreads to other assets as investors fear new attacks from the SEC on other projects.
For cryptocurrency advocates, these actions seem counterproductive. Instead of clarifying the rules, the SEC imposes pressure that ends up eroding the industry’s credibility. Influential figures in the sector, like the CEO of Bitnomial, believe these decisions harm innovation and hinder crypto adoption. For them, this is a battle to be fought not only for Bitnomial or Ripple but for the entire crypto ecosystem. Meanwhile, China is collapsing.
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Fascinated by bitcoin since 2017, Evariste has continuously researched the topic. While his initial interest focused on trading, he now actively seeks to understand all advancements centered on cryptocurrencies. As a writer, he aspires to provide high-quality work that constantly reflects the state of the industry as a whole.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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