Bitnomial Launches First CFTC-Regulated XRP Futures Contract After SEC Withdraws Appeal

Bitnomial, a crypto derivatives exchange, has announced the launch of its XRP futures contract, marking the first-ever U.S. Commodity Futures Trading Commission (CFTC)-regulated XRP futures product in the country. This move comes after the U.S. Securities and Exchange Commission (SEC) withdrew its appeal in the Ripple lawsuit, which had been a significant hurdle for the exchange.

Bitnomial had previously sued the SEC in October 2024 over the agency’s claim that it had jurisdiction over the XRP futures contracts the exchange planned to introduce. With the regulatory stance shifting, Bitnomial has decided to drop its lawsuit against the SEC, citing improved regulatory clarity. The exchange emphasized that the XRP futures contract is physically settled, meaning actual XRP will be delivered upon contract expiration rather than cash settlements.

This development is significant as it ties futures contracts directly to token performance, allowing for more accurate risk assessments. It reflects a shift toward aligning crypto trading with structured market practices and may encourage traders to adopt clearer hedging strategies. The approach suggests a broader market trend toward blending digital assets with traditional finance methods.

Bitnomial’s decision to launch XRP futures comes as part of broader efforts to bring more institutional-grade crypto derivatives to market. The exchange has been working on this product since at least October 2024 and has partnered with three futures commission merchant (FCM) partners: R.J. O’Brien and Associates, marex Capital Markets, Inc., and Bitnomial Clearing LLC. New clients can onboard through these partners.

The SEC had argued that XRP futures constituted securities, requiring Bitnomial to register as a securities exchange prior to launching the product. Bitnomial countered that such compliance was impossible without Ripple registering XRP as a security, which the company has not done. The standoff escalated after Bitnomial cited a 2023 court ruling, which determined that XRP traded on secondary markets does not qualify as a security.

Ripple CEO Brad Garlinghouse announced that the SEC has dropped its appeal in the ongoing case, concluding a legal battle that began in December 2020 over allegations of a $1.3 billion unregistered securities offering. Bitnomial’s case withdrawal followed shortly after this development. The SEC’s decision to back down signals easing regulatory pressure on crypto markets, potentially paving the way for further product approvals like XRP futures in the U.S.

Physical settlement ties futures pricing to actual token value, enhancing risk assessments. Traders gain a clearer picture of volatility, allowing more precise hedging and portfolio adjustments, all under defined market conditions. By adopting a physically settled model, Bitnomial’s product may raise the bar for price clarity and disciplined trading. Its design might also prompt a review of current frameworks by regulators, merging digital and traditional finance.

Linking futures to actual token performance may attract risk-averse investors by offering clear market signals. This refined model could boost overall participation by instilling confidence in stable, transparent asset valuation. With CFTC approval secured, Bitnomial’s XRP futures contract is set to officially go live, adding a new regulated trading option for institutional and retail traders in the U.S. market.