U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler did not answer a direct question at a congressional hearing on whether ether is a security.The SEC chairman said the law is clear on crypto but Congressman Patrick McHenry insisted that the SEC’s regulatory action was “highly uncertain.”
Congressman investigating whether Ether is a security to SEC Chairman Gary Gensler
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler testified before the House Financial Services Committee on Tuesday about SEC oversight. At the hearing, the chairman, Rep. Patrick McHenry (R-NC), asked the SEC chairman whether ether (ETH) is a commodity or a security.
McHenry explained that Bill Hinman, then director of the SEC’s Division of Corporate Finance in 2018, opined that ether is not a security. Last month, he continued, Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam expressed the view that ether is a commodity, adding that the New York State Attorney General argued in a court filing last month that ether is a security.” Obviously, an asset cannot be both a commodity and a security, do you agree?” The senator asked Gensler.
And the SEC chief replied:
Actually, under the Commodity Exchange Act, all securities are commodities. It means that they are excluded commodities, but it means that a security cannot be both an excluded commodity and an included commodity, right?
“Then how is ether classified?” McHenry asked Gensler, and when the SEC chairman tried to give a general answer about securities laws, the senator pressed: “I am asking you, sitting in the chair right now, to evaluate whether ether is a commodity or a security under the law as it exists.”
Gensler insisted that he would not discuss specific tokens, but the senator pointed out that the SEC commissioner had already spoken about one token, Bitcoin, and was now being asked to speak about ethereum. Gensler previously stated that all crypto tokens exceptBTCare securities, but he would not specifically name any other tokens.
Ignoring the senator’s question aboutETHspecifically emphasized that Gensler has 10,000 to 12,000 crypto tokens and continued with the same general explanation that he has said many times:
with the expectation of profit based on If there is a group of entrepreneurs who raise money from the public …
McHenry cut Gensler off mid-sentence and repeated this question: “I am asking one thing. I am asking a specific question, Chairman Gensler. I said this in private. It should come as no shock to you that I am asking this question. Is the ether a commodity or a security?”
Gensler re
“Okay, let me make this clear. The market is not seeing it. Your regulatory actions and the CFTC’s regulatory reaction tell us that there is a great deal of uncertainty here. It is the intent of this committee to correct that uncertainty and actually provide a sound legal basis,” McHenry emphasized.
Many are frustrated with the Gensler-led SEC’s enforcement-centric approach to regulating the crypto sector. Congressman Warren Davidson recently announced that he would introduce legislation to remove the SEC chairman for a “long string of abuses.”
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