Ripple’s CEO and General Counsel strongly opposed US Rep. Brad Sherman’s anti-XRP comments.
Ripple executives have reacted to comments made by Brad Sherman, D-California, on Tuesday, where he urged the Securities and Exchange Commission to go after crypto exchanges that traded XRP.
Sherman, who is the Chair of a Congressional subcommittee focused on the SEC’s enforcement division, said in an oversight hearing on Tuesday:
“The division has determined that XRP is a security and is going after XRP but, for reasons that I’ll bring up in question, has not gone after the exchanges where tens of thousands of illegal securities transactions were occurring.”
He added: “You know [XRP] is security. That means they were illegally operating a securities exchange.”
Ripple Executives React to Rep. Sherman’s Comment
Rep Sherman’s comment did not sit well with Ripple’s top executives, including Ripple CEO Brad Garlinghouse and Ripple’s General Counsel Stuart Alderoty.
The duo reacted to the comments made by Rep. Sherman on their respective Twitter pages.
Attorney Alderoty reminded Rep. Sherman that the United States is yet to classify XRP as a security, as the case is currently being challenged in court.
He noted that only the court would determine whether the cryptocurrency is a security.
“When elected officials don’t understand that the mere filing of a case by the SEC doesn’t determine anything…it’s more than concerning,” Attorney Alderoty added.
Ripple’s General Counsel described Rep. Sherman’s comments as a pernicious effect of the SEC’s regulation by enforcement approach – a tactic that has been heavily slammed by the cryptocurrency community.
Only the Court can make a determination (it's called due process). 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.
— Stuart Alderoty (@s_alderoty) July 19, 2022
On the other hand, Ripple’s CEO believes Rep. Sherman is knowledgeable about legal matters, given that he “was magna cum laude at Harvard Law.”
Garlinghouse added that despite Rep. Sherman having good legal knowledge, he is “opting to advance a political agenda over sound policy and ignoring what the law actually says.”
Rep @BradSherman was magna cum laude at Harvard Law. He must know better but is trying -yet again- to advance a political agenda over sound policy and ignoring what the law actually says. https://t.co/ypIotiBIBf
— Brad Garlinghouse (@bgarlinghouse) July 19, 2022
SEC vs. Ripple Lawsuit
Recall that the SEC charged Ripple in December 2020 for conducting an unregistered securities offering in the United States.
Unlike most cryptocurrency companies, Ripple stood its ground, challenging the SEC’s argument that its native token – XRP – is not a security.
Despite Ripple’s assertion, U.S.-based exchanges were forced to discontinue support for XRP. They fear that if Ripple is found guilty, the SEC may come after them for facilitating the trading of the digital currency on their trading platform.
The case has lingered for more than a year, with no sign that the parties could reach a settlement soon. However, the case is expected to end on or before March 2023, as reported by TheCryptoBasic.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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