US Congressman Brad Sherman has urged the US Securities and Exchange Commission (SEC) to prosecute major cryptocurrency exchanges that have traded xrp, which the regulator considers a stock. “It’s easier to chase the small fish than the big fish, but the big fish that runs major exchanges have done many, many tens of thousands of transactions with xrp,” the legislator said.
The US lawmaker urges the SEC to focus on major cryptocurrency exchanges
Congressman Brad Sherman (D-CA), chair of the House’s Financial Services Subcommittee on Investor Protection, held a hearing on Wednesday to review efforts by the U.S. Securities and Exchange Commission (SEC) to address emerging risks and protecting investors.
During the hearing, Sherman, who is a senior member of the foreign affairs committee, questioned SEC director of application Gurbir Grewal about XRP and tether.
The congressman told Grewal, “You searched for XRP because XRP is a security. But you haven’t searched all the major cryptocurrency exchanges that have processed tens of thousands, if not much more, [XRP] transactions “. He stressed:
If XRP is a security, and you think it is, and I think it is, why aren’t these cryptocurrency exchanges breaking the law?
He continued: “And it is enough that cryptocurrency exchanges have said, ‘well having committed tens of thousands of violations in the past, we promise not to do it again in the future.’ Is it enough to get you out of trouble for the application?
The SEC director replied, “I can’t talk about what we’re looking at and we’re not looking at. We brought exchange cases, we brought one last year against Poloniex. ”
Sherman replied:
It’s easier to chase the small fish than the big fish, but the big fish that handles major exchanges have done many, many tens of thousands of transactions with XRP.
He added: “You know it’s a certainty. This means that they were illegally operating a security exchange. They know it’s illegal because they stopped doing it, even if 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 stablecoin tether (USDT), Sherman said, “And then finally we have tether, which is a money market mutual fund in every way.” He noted that USDT “broke the money” recently.
The California congressman asked the SEC director:
Can you tell us why you searched for land but not tether?
Grewal replied: “It would be inappropriate for me to comment on who we are looking for and not after. But I understand your concerns and we have added resources to our cryptocurrency unit to look at the 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 cryptocurrency terra (LUNA). Following the implosion of the two coins, SEC President Gary Gensler warned that many crypto tokens will fail.
In conclusion, Sherman told Grewal: “You have to face some cases that you are not sure of winning.”
In December 2020, the SEC accused Ripple Labs and its two top executives – CEO Brad Garlinghouse and co-founder Chris Larsen – of conducting $ 1.3 billion of XRP, which the regulator called “a ‘ offer of unregistered securities “. After the lawsuit was announced, cryptocurrency exchanges in the United States began removing XRP, including the Nasdaq-listed cryptocurrency exchange Coinbase.
Responding to Sherman’s statements, many people on Twitter were quick to point out that no country, including the United States, has established XRP as a safety. Stuart Alderoty, Ripple’s general counsel, tweeted Wednesday:
When elected officials don’t understand that simply filing a case by the SEC results in nothing… it’s more than worrying… Only the court can make a decision (it’s called due process).
During Wednesday’s hearing, Congressman Tom Emmer (R-MN) also criticized the SEC’s approach to regulating the cryptocurrency industry. “It seems clear to everyone, except perhaps the Commission, that the SEC is not regulating in good faith,” he said.
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