A lawmaker in the United States, Brad Sherman, has called on the Securities and Exchange Commission (SEC) to go after crypto exchanges. The crypto service providers are what the lawmaker sees as those dealing with XRP tokens.
The SEC has already labeled XRP as a security asset, and the lawmaker wants the commission to go after exchanges. According to Sherman, tens of thousands of transactions involving XRP were done by top crypto platforms. The SEC should go after them rather than small exchanges.
Brad Sherman Calls for the SEC to Focus on Large Exchanges
The federal lawmaker is also the chairman of the House Financial Services Subcommittee on Investor Protection. Sherman organized a Wednesday hearing to assess the SEC’s efforts and how to better guard investors.
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At the hearing, Sherman grilled Gurbin Grewal, the SEC’s Director of Enforcement, about XRP. Accordingly, Sherman wants the SEC to go after the major crypto exchanges that have processed large XRP transactions.
He also alluded that the commission has gone after XRP due to its status as a security product. Still, it has failed to tackle the activities of large exchanges that trade XRP in their thousands.
Responding to the lawmaker, the SEC director emphasizes that he won’t discuss the commission’s activities. The SEC has been handling cases related to crypto exchanges for some time. Grewal added that the SEC had committed resources to help protect investors in the crypto space.
Furthermore, the Congressman has voiced his concerns about the cases the commission chooses to pursue. However, the SEC official noted that cases are given the utmost attention based on the offense committed.
U.S. SEC Investigating Terra UST and LUNA
After the ecosystem’s collapse in May, the financial watchdog became interested in the Terra network’s case. As a result, it has begun investigating the stablecoin, Terra UST, and the native token LUNA.
In the wake of the implosion of the two digital coins, SEC Chair Gary Gensler has warned about the collapse of most tokens.
The SEC has been engaged in a long-running court case with XRP’s parent company, Ripple Labs, and two of its executives. The commission charged the crypto exchange in December 2020 alongside Brad Garlinghouse and Chris Larsen.
Furthermore, the company and individuals were accused of offering unregistered securities worth $1.3 billion XRP. Many crypto exchanges in the U.S. have decided to delist XRP from their platforms.
The case has been in court for more than a year, with Ripple making significant progress against the regulator.
Meanwhile, Ripple’s general counsel, Stuart Alderoty, has slammed Sherman for calling XRP security. Alterity added that most elected officials have no idea how the crypto industry operates.
The mere filing of a case by the SEC does not mean that an exchange is guilty of the allegations labeled against it.
Meanwhile, another Congressman, Tom Emmer, criticized the SEC for its approach to regulating the crypto industry. Emmer believes that the SEC is not taking the right approach.