US lawmaker slams SEC chief enforcement officer for failing to tackle 'big fish' crypto exchanges

Rep Brad Sherman says SEC law enforcement case against Poloniex is like going after "small fish” against major exchanges, which may include Kraken and Coinbase.

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Brad Sherman, the congressman who previously called for a ban on cryptocurrencies in the United States, has criticized the Securities and Exchange Commission's (SEC) approach to enforcement among major exchanges of crypto.

At a Tuesday hearing before the House Financial Services Committee, Sherman said SEC Director of Enforcement Gurbir Grewal needed to show “strength and courage” when pursuing securities business against cryptocurrency exchanges in the United States. The lawmaker added that the SEC's enforcement division had "sought" XRP as security, but not crypto exchanges that processed "tens of thousands" of transactions of the token.

"If XRP is a security - and you think it is, and I think it is, why aren't these crypto exchanges in violation of the law and is it enough that crypto exchanges said "well, having committed tens of thousands of breaches in the past, we promise not to do more in the future? asked Sherman. "Is that enough to get you out of trouble?"

Rep Brad Sherman addressing the House Committee on Financial Services on Tuesday

Grewal responded that he was unable to clarify whether the SEC's Enforcement Division was investigating any crypto exchanges, but referenced to a case brought against Poloniex in August 2021 for trading cryptocurrencies considered securities to US investors on its platform between July 2017 and November 2019. Sherman countered that the crypto trading platform was a "little fish" among other major exchanges, probably referring to Kraken, Coinbase and Binance US:

"The big fish that exploits the...