U.S. Rep Calls XRP “Illegal Security” And Wants SEC To Go After XRP

During a house subcommittee oversight hearing today which looked into the SEC’s role in crypto, subcommittee chair Brad Sherman asks why The Securities and Exchange Commission hasn’t looked into exchanges which traded XRP, an “illegal security”.

XRP is a security says Sherman

Brad Sherman, D-California approved of the SEC’s case against Ripple during the commission’s enforcement division drill session. He however frowned at the commission’s disregard of the exchanges which had traded XRP.

The session saw the division director Gurbir Grewal testify, and it centered on the SEC’s real role in crypto. Sherman acknowledged that the enforcement division would need to gear up efforts so as to really play its role.

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.

He continued by saying that all parties involved are aware that XRP is a security, meaning the exchanges operated an illegal securities exchange, he urged the division to pay attention to that.

Stuart Alderoty says Sherman’s comment is an allegation

Ripple’s general counsel, Stuart Alderoty claims Sherman’s comments are false because the case hasn’t been decided 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.

Meanwhile Sherman is extremely critical of cryptocurrencies and even called for a blanket ban in 2018.

Since the SEC’s case against Ripple, all of the major U.S. exchanges, including Coinbase, halted XRP trading.

SEC Chair Gary Gensler had also argued that all crypto exchanges should register as securities exchanges with the commission, but this has not been adopted.