The Securities and Exchange Commission hasn’t investigated exchanges that traded XRP, a “illegal security,” according to subcommittee chair Brad Sherman during a house subcommittee oversight hearing on the SEC’s role in cryptocurrencies today.
During the enforcement division drill session of the commission, Brad Sherman, a Democrat from California, supported the SEC’s case against Ripple. The commission’s contempt for the exchanges that had traded XRP, though, made him frown.
“The division has determined that XRP is a security and is going after XRP but, for reasons that I’ll bring up in questions, has not gone after the exchanges where tens of thousands of illegal securities transactions were occurring, Sherman said.”
More work needs to be done!
Gurbir Grewal, the division director, testified during the hearing, which was focused on the SEC’s actual position in cryptocurrency. Sherman admitted that in order for the enforcement section to effectively fulfill its mandate, more work would need to be done.
He went on to add that since everyone engaged is aware that XRP is a security, the exchanges were operating an unauthorized securities exchange, and he encouraged the division to take notice of it.
Stuart Alderoty, the general counsel for Ripple, asserts that Sherman’s statements are untrue because the lawsuit hasn’t been resolved in court.
“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 said”
Sherman, meanwhile, has been harshly dismissive of cryptocurrencies and has even advocated for a complete ban in 2018.
All of the significant American exchanges, including Coinbase, have stopped XRP trading since the SEC’s lawsuit against Ripple. Gary Gensler, the chair of the SEC, had also urged that all cryptocurrency exchanges should register with the commission as securities exchanges, but this position was not adopted.
Meanwhile, XRP has made some significant gains in the last few days. The coin is trading at $0.37, and has gained three percent in the last 24 hours.