U.S. Rep. calls XRP a security, Ripple CEO slams back calling it a political agenda

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  • Ripple’s General Counsel said that only the court has the legal right to conclude and Congress rep. should avoid throwing their weight behind it.
  • Ripple CEO Brad Garlinghouse called Rep. Sherman’s comments a political agenda.

During a recent congressional hearing, U.S. Representative Brad Sherman, D-California, urged the U.S. Securities and Exchange Commission (SEC) to go after cryptocurrency exchanges that trade XRP. In an oversight hearing on Tuesday, July 19, the Chair of a Congressional subcommittee focused on the SEC’s enforcement division saying:

The division faces new challenges in the form of cryptocurrencies and other digital assets. 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.

You know [XRP] is security. That means they were illegally operating a securities exchange. If they know it’s illegal and you know it’s illegal and I know it’s illegal, I hope you focus on that.

Ripple executives were quick to respond on the matter. Ripple’s General Counsel Stuart Alderoty lashed out at Rep. Sherman stating that the U.S. is yet to classify XRP as a security. He added that only the court has the legal right to determine whether XRP is a security or not.

Attorney Alderoty called Rep. Sherman’s comments an outcome of the SEC’s enforcement approach. He further added:

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.

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.

Ripple CEO says there’s a political agenda

Ripple CEO Brad Garlinghouse also jumped into the discussion. Garlinghouse said that Rep. Sherman is quite knowledgeable about legal matters considering he “was magna cum laude at Harvard Law.” 

The Ripple CEO slammed Rep. Sherman for advancing his political agenda further. “He must know better but is trying -yet again- to advance a political agenda over sound policy and ignoring what the law actually says,” he said.

The U.S. SEC slapped a legal lawsuit on Ripple in December 2020 stating that the company sold XRP tokens as unregistered securities during their 2013 ICO. Ripple has been defending its position of no wrongdoing. There have been multiple court hearings as the two parties – Ripple and the SEC – defend their position in the courts.

Related: Why isn’t the U.S SEC suing former Ripple CTO? Ripple comes after the SEC

Due to the ongoing legal case, Ripple’s XRP has taken a backseat among its other altcoin peers. Unlike other altcoins, Ripple XRP didn’t have a mega rally during the bull run of 2021. However, it still continues to hold a position among the top ten global cryptocurrencies by market cap.