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July 19, 2022

US legislator slams SEC chief for not attacking big crypto exchanges

The Securities and Exchange Commission’s (SEC) approach to regulation of large crypto exchanges has been challenged by Brad Sherman, the congressman who previously advocated for a ban on cryptocurrencies in the United States.

A House panel on financial services held a hearing on Tuesday in which Rep. Sherman urged SEC chief Gurbir Grewal to demonstrate more fortitude and bravery in pursuing securities lawsuits against cryptocurrency exchanges in the US.

XRP was targeted as a security by the SEC’s enforcement division, but not the crypto exchanges that handled the token’s hundreds of thousands of transactions, according to the legislator.

To say that these crypto exchanges aren’t in breach of the law because they’ve committed thousands of infractions doesn’t answer the question: if XRP is a security, why aren’t these crypto exchanges breaking the law? Sherman inquired. No, you’re still on the hook for any fines or penalties.

Grewal said that he couldn’t say if the SEC enforcement division was looking into any crypto exchanges, but he pointed to a complaint launched against Poloniex in August 2021 for dealing with cryptocurrencies considered securities to US clients on its platform between July 2017 and November 2019. It’s possible Sherman was talking to Kraken, Coinbase, or Binance US when he said the crypto trading site was “a little fish” in comparison to the other large exchanges.

XRP was used in tens of thousands of transactions by the big fish at the main exchanges. Because it’s a security, they were running an unlawful stock exchange. Even though it was lucrative, they stopped doing it since they knew it was unlawful. Let me know how it goes.

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The SEC’s budget proposal for the 2023 fiscal year included worries about cryptocurrency enforcement from both SEC chair Gary Gensler and New Jersey Gov. Chris Grewal.

A written statement Grewal prepared for the court said that the crypto market was growing more sophisticated, making it more difficult to identify any wrongdoing.