Brad Sherman urged the SEC to pursue major cryptocurrency exchanges trading xrp. The regulator considers this a security. The lawmaker stated that it is easier to pursue the smaller fish than the larger fish. However, the large fish running major exchanges made many, many thousands of transactions using xrp.
Representative Brad Sherman (D-CA), who is the chairman of the House Financial Services Subcommittee on Investor Protection held Wednesday’s hearing to review the U.S. Securities and Exchange Commission’s (SEC) efforts to address emerging risks and protect investors.
Sherman, a senior member on the Foreign Affairs Committee, asked Gurbir Grewal, SEC Director for Enforcement, questions about XRP, and tether.
Grewal was told by the congressman: “You’ve gone after XRP because XRP security. But, you haven’t gone after all major crypto exchanges that processed thousands of transactions [ XRP] he stressed.
If XRP is considered a security and you and I believe it to be, then why are these crypto-exchanges not in contravention of law?
He said: “And, it is enough that the cryptocurrency exchanges have stated, “Well having committed tens-of thousands of violations in past, we promise to not do anymore in future.”
The SEC director responded, “I cannot talk about the matter we are looking into and not considering.” We have brought cases against Poloniex, and we also brought one last year.
It is easier to pursue the small fish than those who are bigger, but large fish that operate major exchanges made many thousands of transactions using XRP.
He said, “You know that it’s security. This means that they illegally operated a security exchange. They knew it was illegal because they stopped operating it even though it was lucrative. If they are aware it is illegal, and you also know it’s unlawful, I encourage them to focus on that.
Sherman turned his attention to stablecoin-tether ( USDT), and said that “and then finally we have the tether which is a money markets mutual fund in every manner.” He also noted that USDT recently “broke a buck.”
California congressman asked SEC director:
Tell us why you chose terra over tether.
Grewal responded: “It would not be appropriate for me to comment about who we are going after or not. However, I am sensitive to your concerns. We have increased resources in our crypto asset unit to examine issues that could put investors at risk. This includes the questions you raised in your question.
The SEC is looking intoterrausd, the algorithmic stablecoin which collapsed along with cryptocurrency Terra (LUNA) in May. After the implosion, Gary Gensler, Chairman of the SEC warned that many crypto tokens would fail.
Sherman said to Grewal, “You have to accept cases that you aren’t certain of winning.”
The SEC indicted Ripple Labs’ CEO Brad Garlinghouse, and Chris Larsen, its co-founder, with $1.3 billion in XRP. This was a “unregistered security offering.”
Many people took to Twitter to respond to Sherman’s statements. They pointed out that no country, not even the United States, has declared XRP to be a security. Stuart Alderoty is Ripple’s general counsel.
It’s not enough for elected officials to understand that the SEC filing of a case doesn’t make anything happen.
On Wednesday, Congressman Tom Emmer (R – Minnesota) also criticised SEC’s approach in regulating the crypto market. He stated that it was obvious to all except the Commission that the SEC isn’t regulating in good faith.