Crypto exchange Bitnomial has decided to withdraw its lawsuit against the US Securities and Exchange Commission in anticipation of launching its Ripple XRP futures in the United States.
The Chicago-based company announced on March 19 via a social media post that its XRP futures are regulated by the US Commodity Futures Trading Commission (CFTC) and will be accessible to existing users starting March 20.
“Bitnomial is set to introduce the first-ever CFTC-regulated XRP futures in the US — physically settled to have a genuine market impact,” the company stated.
Additionally, they mentioned, “We have voluntarily dropped our case against the SEC as we see an improvement in regulatory clarity.”
In August 2024, Bitnomial had submitted a self-certification to the CFTC to list XRP futures contracts. However, the SEC intervened, insisting that Bitnomial register as a securities exchange before proceeding with the listing.
In response, Bitnomial filed a lawsuit against the SEC and its commissioners on October 10, alleging that the agency was overstepping its jurisdiction by classifying XRP as a security.
The launch of Bitnomial’s XRP futures coincides with Ripple CEO Brad Garlinghouse’s announcement on March 19 that the SEC has decided not to pursue an appeal against a ruling that stated XRP is not a security for retail sales.
A judgment made on July 13, 2023, by Judge Analisa Torres determined that XRP is not a security for retail transactions; however, she noted that it could be considered a security when sold to institutional investors, aligning with the conditions of the Howey test. The SEC was in the process of appealing this decision.
The SEC initiated legal action against Ripple Labs back in December 2020, accusing the company of unlawfully selling its token as an unregistered security.
The SEC has gradually softened its stringent approach to cryptocurrency, which had been established under former Chair Gary Gensler, and has started to dismiss an increasing number of enforcement actions against crypto companies.
Mark Uyeda, the acting chair who stepped in after Gensler’s resignation on January 20, indicated on March 17 plans to revoke a Biden-era proposal aimed at tightening crypto custody regulations for investment advisers.
On March 10, Uyeda also mentioned that he had asked SEC staff to consider options to withdraw part of the proposed changes that would extend regulations of alternative trading systems to encompass crypto firms, requiring them to register as exchanges.