U.S. Rep. Brad Sherman Says SEC Will Win the Lawsuit Against Ripple, XRP Enthusiasts React

The U.S. Congressman is still backing the SEC to win the lawsuit against Ripple.

In a recent FOX Business interview, U.S. Rep. Brad Sherman reiterated further that the Securities and Exchange Commission should also clamp down on U.S.-based exchanges that facilitated Ripple (XRP) trading. 

Rep. Sherman told FOX Business journalist Charles Gasparino that he is confident the SEC would win the case against Ripple because XRP is a security.  

He added that he has been in contact with SEC chair Gary Gensler and the agency’s Enforcement Director Gurbir Grewal to expand the Ripple lawsuit to also include exchanges that facilitated the trading of XRP. 

SCOOP via @EleanorTerrett: House @FSCDems member @BradSherman tells @FoxBusiness he believes @SECGov will easily win its case against @Ripple over the legality of its unregistered sales of #XRP and has been in contact w @GaryGensler to expand the case. More at 140pm @TeamCavuto

— Charles Gasparino (@CGasparino) July 20, 2022

Why Sherman Thinks, XRP Is A Security

Attorney Jeremy Hogan, a partner at Hogan & Hogan law firm, marveled at how Sherman concluded that XRP is security since the court ordered both parties not to share evidence with third parties. 

Ask Mr. Sherman how he arrived at his conclusion – as both parties are under Court Order not to disclose evidence to 3rd parties (such as him).

Did the SEC violate Court rules and provide him the evidence in the case? Or, is he making recommendations to Gensler without basis?

— Jeremy Hogan (@attorneyjeremy1) July 20, 2022

Responding to attorney Hogan’s tweet, Eleanor Terrett, a FOX Business journalist, said Rep. Sherman is confident about XRP being security based on “the reasons outlined in the SEC’s position.” 

When I asked Rep. Sherman why he thinks $XRP is a security he told me "for the reasons set forth in the SEC's position" and went on to explain that XRP investors relied on @Ripple efforts to bump up the price. He then said the proof that he's right stems from the crypto exchanges https://t.co/D1fuwsIlZZ

— Eleanor Terrett (@EleanorTerrett) July 20, 2022

Sherman added that XRP investors relied on Ripple to boost the price of the cryptocurrency, thus making the coin a security. 

Furthermore, Sherman noted that U.S.-based exchanges de-listing XRP immediately after the SEC slammed the charges against Ripple, which is another proof that the cryptocurrency is a security. 

“[Exchanges] also concluded that XRP is a security too,” Sherman added. 

Recall that Rep. Sherman had recently called on the SEC to clamp down on exchanges involved in facilitating the trading of XRP before the Ripple lawsuit. 

He made the statement during an oversight hearing for the SEC Enforcement Division. 

“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,” Rep. Sherman said at the time. 

Reactions Trail Rep. Sherman’s Comment

His comments had previously sparked reactions from top Ripple executives, including the company’s CEO, Brad Garlinghouse. 

Garlinghouse noted that Sherman is trying to advance a political agenda over sound policy while ignoring the law. Ripple’s General Counsel, Stuart Alderoty, also slammed Rep. Sherman for calling on the SEC to clamp down on exchanges that facilitated XRP trading. 

Aside from Ripple’s top executives, attorney John Deaton, who was granted Amici status in the lawsuit, also aired his opinion on the statement made by Rep. Sherman. 

This is what is disgusting about Sherman’s comments. In Jan. 2019 @coinbase met w/the SEC about listing XRP and informed the SEC it decided XRP was NOT a security and intended to list XRP but would not do so if the SEC disagreed. The SEC DID NOT disagree.

— John E Deaton (207K Followers Beware Imposters) (@JohnEDeaton1) July 21, 2022