Congressman Sherman Wants SEC To Punish Exchanges For Trading XRP

July 27, 2022 2:52 pm

Looks like US Congressman Brad Sherman is continuing to voice his rejection of XRP at a recent oversight hearing that involved the SEC.

In the hearing, Sherman states that the SEC has overlooked crypto exchanges that have continued to allow for the trading of XRP even after the lawsuit.

Of course, this was met with much criticism within the XRP community as many did not believe that XRP was considered a security in the first place.

Restricting the trading of XRP on all exchanges would just be more insult to the crypto community and it seems that this is what Sherman is doing.

However, it may not come as a surprise given that many of Sherman’s campaign donors may have a vested interest in restricting the growth of crypto.

BlockWorks.co reports:

“If XRP is a security, and you think it is, and I think it is, why are these crypto exchanges not in violation of law?” Sherman, who called for a complete ban on cryptocurrencies in 2019, asked SEC division director Gurbir Grewal.

Grewal defended the Commission, saying it had gone after Delaware-headquartered exchange Poloniex last year. To that, Sherman said: “It’s easier to go after the small fish than the big fish.”

The SEC has been locked in a lengthy lawsuit with Ripple Labs since December 2020, accusing the company and two executives of raising at least $1.3 billion by selling XRP — which the regulator has deemed an unregistered security.

Ripple Labs has been fighting that battle by claiming the token and its underlying infrastructure are sufficiently decentralized so as not to be an investment contract, and hence should not be registered under the SEC.

So far there are a number of exchanges within the US that have complied and stopped trading of XRP since the lawsuit.

These include crypto exchanges such as Coinbase, Binance, FTX, and Kraken which largely affects all US residents although firms and residents that are located outside the US may be able to escape the SEC’s control.

So far, the court has not yet made a final decision on whether or not XRP is considered a security and many are anxious for a final result given that the case is quickly approaching the two year mark.

When the lawsuit was announced, the price of XRP had crashed, but it seems that XRP is now doing very well despite the lawsuit with the digital asset’s having risen by 60% since then.

BlockWorks.co concludes:

Rep. Tom Emmer also slammed the SEC separately during the hearing, saying it hasn’t clarified which areas of the crypto industry fall under its jurisdiction and that its Strategic Hub for Innovation and Financial Technology (FinHub) has “dissolved” under Chairman Gary Gensler.

“Under Chair Gensler, the SEC has become a power-hungry regulator, politicizing enforcement, baiting companies to ‘come in and talk’ to the Commission then hitting them with enforcement actions and discouraging good-faith cooperation,” Emmer said.

The SEC pledged to double the headcount of its crypto enforcement division to 50 in May.

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