Binomial is a Chicago-based crypto exchange that has dropped its lawsuit against the U.S. Securities and Exchange Commission. It was right before the US launch of Ripple’s XRP futures. The firm, via X on March 19, announced that the XRP Futures Contracts regulated by the U.S.Commodity Futures Trading Commission would be made available to existing users on March 20.
Table of Contents
The SEC Lawsuit and Regulatory Clarity
Binomial initially filed a suit against the SEC on October 20, 2023, after the agency demanded that the exchange register as a security exchange before it could list XRP Futures. Binomial then sued the SEC, and its five commissioners and accused them of exceeding their authority in classifying XRP as a security.
Binomial, however, has dismissed the claim now that regulatory clarity is improving. In a press release, the exchange said that it had achieved a landmark: “Binomial launched the first-ever CFTC-regulated XRP Futures – physically settled for real market impact.” We’ve also voluntarily dropped our lawsuit against the SEC.”
XRP Futures (and CFTC approval)
Binomial filed a self-certification with the CFTC to list XRP contracts at its exchange by August 2024. SEC tried to stop the exchange from listing XRP futures contracts on its exchange in August 2024 but demanded that it first register as a security exchange. Despite the court battle, Binomial is now able to successfully launch its crypto derivatives under CFTC regulations. This marks a major development in the market.
Ripple’s Legal Victory, and SEC’s Shifting Position
Bitnomial’s XRP Futures Launch is in line with Ripple’s recent legal wins. Brad Garlinghouse, CEO of Ripple announced on March 19 that the SEC decided not to appeal a previous court ruling that determined that XRP was not a securities for retail sales. The decision was based on a judgment rendered by Analisa Torres in July 2023. She found that XRP, while not being a security, met the Howey Test when it was sold to institutions.
In December 2020 the SEC filed a suit against Ripple, accusing it of selling XRP illegally as non-registered securities. The agency has started to change its stance regarding crypto enforcement. The SEC’s aggressive approach to regulation has been gradually reduced under the Trump administration. Numerous enforcement actions that were initiated by former chair Gary Gensler have also been dismissed.
The Regulatory Landscape is Changing
Mark Uyeda, who became the SEC acting chairman on January 20th, has shown a willingness to be more flexible regarding crypto regulations. He announced on March 17 that he would withdraw the rule, which was proposed by Biden’s administration to strengthen crypto custody requirements for investment advisors. In a speech on March 10, Uyeda said that to abandon parts of the proposed changes, he instructed the EC to look at options to drop some requirements that crypto firms register as alternative trading systems under new regulations.
These developments are bringing about a change in the industry, allowing for more clarity on regulations and potentially a less restrictive environment. Bitnomial’s launch of XRP Futures is a significant step forward in this changing landscape. It signals a broader acceptance of and regulation of cryptocurrency derivatives.
