US Congressman Brad Sherman has urged the US Securities and Exchange Commission (SEC) to go after a major cryptocurrency exchange that trades xrp, which regulators consider a security. “It’s easier to go after the small fish than the big fish, but the big fish of the main exchange operations do many, many tens of thousands of transactions with xrp,” said the lawmaker.
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 examine efforts by the US Securities and Exchange Commission (SEC) to address emerging risks and to protect investors.
During the hearing, Sherman, who is a senior member of the Foreign Affairs Committee, asked SEC Enforcement Director Gurbir Grewal about it XRP and tether.
The congressman told Grewal: “You have followed XRP because XRP is security. But you haven’t followed all the major crypto exchanges that process tens of thousands, if not more, [XRP] transaction.” He emphasized:
If XRP it is security, and you think it is, and I am it, why is this crypto exchange not against the law?
He continued: “And, it is enough that the crypto exchange has said, ‘we have committed tens of thousands of violations in the past, we promise not to do it again in the future.’ Is that enough to speed you up for enforcement?
The director of the SEC replied: “I can’t talk about what we see and don’t see. We have brought the exchange case, we brought one last year Poloniex.”
Sherman responded:
It’s easier to find small fish than big fish, but the big fish of major exchange operations do many, many tens of thousands of transactions with XRP.
He added: “You know it’s a security. It means they’re doing security exchanges illegally. They know it’s illegal because they stopped doing it, even if they’re making a profit. 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 our attention to tether stablecoin (USD), Sherman said, “And finally we have tether, which is a money market mutual fund in every way.” He noted that recently USD “damaged money.”
A congressman from California asked the SEC director:
Can you tell me why you followed terra but not tether?
Grewal replied: “It is not appropriate for me to comment on who will and will not. But I understand your concerns and we have added resources to the crypto assets unit to look at the issues that put investors at risk, including the issues you raised in your question.
The SEC is investigate terrausd (UST), an algorithmic stablecoin that collapsed in May along with cryptocurrency terra (LUNA). After the implosion of two coins, SEC Chairman Gary Gensler warned that many crypto tokens will fail.
In conclusion, Sherman told Grewal: “You have to deal with some cases that you’re not sure you’re going to win.”
In December 2020, the SEC charged Ripple Labs and its two top executives — CEO Brad Garlinghouse and co-founder Chris Larsen — with $1.3 billion. XRP, which regulators say is an “unregistered securities offering.” Following the announcement of the lawsuit, crypto exchanges in the US began delisting XRPincluding the Nasdaq-listed crypto exchange Coinbase.
In response to Sherman’s statement, many people on Twitter were quick to point out that no country, including the US, has determined that XRP is security. Stuart Alderoty, general counsel for Ripple, tweeted Wednesday:
When elected officials do not know that just filing a case by the SEC does not determine anything … it is more than about … Only the court can determine (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 those on the Commission, that the SEC is not well managed,” he said.
What do you think about the comments of Congressman Brad Sherman? Let us know in the comments section below.
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