Brad Sherman, a US Congress member, has also asked the SEC to prosecute exchange firms that allowed trading of XRP. According to Sherman, the regulator had gone after XRP while leaving the exchange firms.
The lawmaker noted that the SEC is taking the easy way out. This is because the regulator chose to go after XRP (the small fish). Meanwhile, there are exchange firms that have allowed thousands of XRP transactions.
US Congressman Asks SEC To Sue Crypto Exchange Firms Trading XRP
Brad Sherman, also the Head of a Subcommittee on Investor Protection, had a meeting on Wednesday. The aim was to assess the efforts of the SEC to protect the rights of investors and address risk concerns.
At the meeting, the congressman bombarded Gurbir Grewal, the Director of Enforcement at SEC, with questions. Sherman talked about Tether and XRP.
According to Sherman, the regulator which considers XRP a security had filed a lawsuit against it. However, the regulator has done nothing to exchanges that allowed thousands of XRP transactions.
Therefore, he asked Grewal why the agency had not prosecuted these exchange firms. Also, he added that the agency would pardon these exchanges if they decide to stop trading XRP despite doing so in the past.
In reply to the statement, Grewal obliged that he could not discuss an ongoing case. Moreover, he stated that the regulator had prosecuted exchange firms.
He cited the last prosecution of Poloniex which took place in 2021. Sherman also added the SEC is going after a small fish leaving the big ones.
The Lawmaker Unsatisfied With The SEC
According to the lawmaker, since the SEC considers XRP a security, these exchanges were offering an illegal security to clients. Additionally, Sherman argued that the firms stopped trading XRP because they knew it was illegal.
Ending the XRP discussion, he asked the watchdog to look into that. Afterward, the congressman turned his attention to the USDT stablecoin. According to him, USDT had broken the buck recently.
Therefore, he questioned the director for not going after Tether after it began investing in Terra. Meanwhile, Grewal replied that he could not say anything about the agency’s operations.
However, the director acknowledged that he understood the concerns of the lawmaker. As a result, the watchdog has increased the resources of its crypto unit. This is to enable them to assess possible risks against investors.
The regulator had been investigating Terra following the fall of its stablecoin (UST) and crypto (LUNA). Even Gary Gensler, SEC Chairman, said more crypto tokens would fall soon.
Apart from Sherman, congressman Emmer had criticized the approach of the SEC towards crypto regulation. According to him, the wavering is not supervising the sector in good faith.