Ripple doesn’t stand a chance against the Securities and Exchange Commission in its ongoing court battle, this US congressman says.
U.S. Representative Brad Sherman stated in a recent FOX Business interview that he believes the SEC would prevail in its legal fight against Ripple because XRP, the native cryptocurrency on the Ripple network, is a security.
In December 2020, the SEC filed a high-profile lawsuit against Ripple, alleging that XRP is an unregistered security. The SEC accused the company and two executives of collecting at least $1,3 billion through the sale of XRP.
As of this writing, XRP is trading at $0.35, up 8.5% in the last seven days, data from Coingecko show, Thursday.
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Ripple Vs. SEC Case To Drag On
The court has not yet evaluated the token’s regulatory classification, as the matter is not scheduled to be decided until the following year.
XRP is a digital asset that operates on the XRP Ledger, a blockchain developed by Jed McCaleb, David Schwartz, and Arthur Britto. McCaleb and Britto would eventually form Ripple and use XRP to conduct network transactions.
Sherman is recognized for being a ferocious adversary of cryptocurrencies. In 2018, he pushed for a complete ban on cryptocurrencies.
Can I get a fact check on aisle 2, please? Rep Sherman, the US has not (in fact, no country has) determined XRP to be 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. https://t.co/Py6jWIl2Gf
— Stuart Alderoty (@s_alderoty) July 19, 2022
He recently asked the SEC to restrict XRP trading on US-based cryptocurrency exchanges. The congressman even took a swipe at the commission , claiming that it has failed to pursue cryptocurrency exchanges that backed the token’s trade.
Ripple’s general counsel, Stuart Alderoty, disputed with the Democratic representative for California’s 30th congressional district that the mere filing of the case does not reveal whether or not the token is a security.
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
For his part, attorney Jeremy Hogan was astounded by Sherman’s conclusion that XRP is a security, given the court’s ruling that the plaintiff and the defendant cannot communicate evidence with third parties.
FOX Business reporter Eleanor Terrett responded to Hogan’s tweet by stating that the congressman is certain that XRP is a security due to “the grounds articulated in the SEC’s view.”
XRP total market cap at $16.9 billion on the daily chart | Source: TradingView.com
Congressman Says SEC Only Goes After ‘Small Fish’
“If XRP is a security… why are these crypto exchanges not in violation of the law?” Sherman questioned SEC division director Gurbir Grewal.
In his defense of the SEC, Grewal responded by saying the commission had pursued the Delaware-based exchange Poloniex in 2021. Sherman responded, “It’s easier to pursue small fish than large ones.”
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Popular crypto legal counsel John Deaton weighed in on the topic, noting that the US regulator has “stated that it doesn’t make security determinations — only the Federal District Court can.”
Brad Garlinghouse, CEO of Ripple, also commented on Sherman’s statement. He said that the congressman’s remarks demonstrate that he is attempting to pursue a political agenda. Interestingly, regulatory debates like the one around Delaware sports betting show how different sectors are grappling with evolving legal frameworks, much like the current uncertainty surrounding XRP’s classification.
The SEC vs. Ripple case is a hard one to call. Both parties appear to have some procedural success, at least in their own eyes.
For the time being, it’s a stalemate.
Featured image from Photography Informers, chart from TradingView.com
