During a recent congressional hearing on the U.S. Securities and Exchange Commission’s Division of Enforcement oversight, Rep. Brad Sherman (D-CA) stated that XRP, one of the top cryptocurrencies by market capitalization, is security.
Rep. Brad Sherman (D-CA)
Ripple’s Stuart Alderoty pushed back against Sherman’s claims since the court is yet to make such a determination
He also asked division director Gurbir Grewal why the agency hadn’t clamped down on trading platforms that offer illegal securities like XRP. Sherman suggested that these trading platforms operate like illegal securities exchanges. The SEC took Ripple to court in December 2020, alleging that XRP is unregistered security in its high-profile lawsuit. The case is set to resolve next year, meaning that the court is yet to determine the regulatory status of the token.
Stuart Alderoty, Ripple’s general counsel, pushed back against Sherman’s recent comment claiming that the mere filing of the case doesn’t determine whether or not the token is a security. “This is the pernicious effect of the SEC’s reg by enforcement approach – harming people, markets, and American innovation – with unproven allegations masquerading as regulation,” he commented.
Following the lawsuit, all major U.S. exchanges, including Coinbase, have moved to halt XRP trading to remain regulatory compliant. Sherman is known for being extremely critical of cryptocurrencies. Back in 2018, he called for a blanket ban on cryptocurrencies. Last June, he called for shutting down the industry, adding that he would rather let people buy lottery tickets. In December, he criticized Coinbase CEO Brian Armstrong for not attending a crypto-related congressional hearing.
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