US Congressman Brad Sherman has urged the US Securities and Exchange Commission (SEC) to crack down on major cryptocurrency exchanges that traded xrp, which the regulator considers a security. “It’s easier to go after the small fish than the big fish, but the big fish that operate the major exchanges have done many, many tens of thousands of transactions with xrp,” the legislator said.
US Lawmaker Urges SEC to Focus on Major Crypto Exchanges
Congressman Brad Sherman (D-CA), chairman of the House Financial Services Subcommittee on Investor Protection, held a hearing Wednesday to review efforts by the states Securities and Exchange Commission (SEC) United to face emerging risks and protect investors.
During the hearing, Sherman, who is a senior member of the Foreign Relations Committee, questioned SEC Chief Enforcement Officer Gurbir Grewal about XRP and tethering.
The congressman told Grewal, “You sued XRP because XRP is a security. But you haven’t gone after all the major crypto exchanges that have handled tens of thousands, if not many more, [XRP] transactions.” He pointed out:
If XRP is a security, and you think it is, and I think it is, why aren’t these crypto exchanges in violation of the law?
He continued, “And, is it enough that crypto exchanges have said, ‘Well, after committing tens of thousands of breaches in the past, we promise not to in the future. Is that enough to get you out of trouble when it comes to enforcement? »
The SEC director replied, “I can’t talk about what we watch and don’t watch. We carried foreign exchange business, we carried one last year against Poloniex.
It’s easier to go after the small fish than the big fish, but the big fish that operate the major exchanges have done many, many tens of thousands of transactions with XRP.
He added: “You know it’s a security. This means that they were illegally operating a security exchange. They know it’s illegal because they stopped doing it, even though it was profitable. So if they know it’s illegal and you know it’s illegal and I know it’s illegal, I hope you focus on that.
Turning his attention to the tether (USDT) stablecoin, Sherman said, “And finally we have tether, which is a money market mutual fund by any measure.” He noted that recently the USDT “broke the ball.”
The California congressman asked the SEC director:
Can you tell us why you went after terra but not tether?
Grewal replied, “It would be inappropriate for me to comment on who we are going after and not after. But I understand your concerns, and we’ve added resources to our Crypto Assets Unit to look at issues that put investors at risk, including the issues you raised in your question.
The SEC is investigating terrausd (UST), the algorithmic stablecoin that collapsed in May along with the cryptocurrency terra (LUNA). Following the implosion of the two coins, SEC Chairman Gary Gensler warned that many crypto tokens would fail.
In conclusion, Sherman told Grewal, “You have to face cases that you’re not sure you’ll win.”
In December 2020, the SEC accused Ripple Labs and its two top executives – CEO Brad Garlinghouse and co-founder Chris Larsen – of making $1.3 billion worth of XRP, which the regulator said was a “unregistered securities offering”. Following the news of the lawsuit, crypto exchanges in the United States began delisting XRP, including Nasdaq-listed crypto exchange Coinbase.
Responding to Sherman’s statements, many people on Twitter were quick to point out that no country, including the United States, has determined that XRP is a security. Stuart Alderoty, general counsel for Ripple, tweeted on Wednesday:
When elected officials do not understand that the simple filing of a case by the SEC does not determine anything… it is more than worrying… Only the court can decide (it’s called due process).
During Wednesday’s hearing, Congressman Tom Emmer (R-MN) also criticized the SEC’s approach to regulating the crypto industry. “It seems clear to everyone, except perhaps those at the Commission, that the SEC does not regulate in good faith,” he said.
What do you think of Congressman Brad Sherman’s comments? Let us know in the comments section below.
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