The chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, did not answer a direct question at a congressional hearing about whether ether is a security. While the SEC chair insisted that the law is clear about cryptocurrencies, Congressman Patrick McHenry argued that the SEC’s regulatory actions say “there is a lot of uncertainty.”
Lawmaker questions SEC chairman Gary Gensler on whether ether is a security
US Securities and Exchange Commission (SEC) Chairman Gary Gensler testified Tuesday before the House Financial Services Committee regarding oversight of the SEC. During the hearing, the chairman of the committee, Congressman Patrick McHenry (R-NC), asked the chairman of the SEC if ether (ETHA commodity or security.
McHenry explained that in 2018, Bill Hinman, who was the director of corporate finance at the SEC at the time, stated that ether was not a security. Last month, CFTC Chairman Rustin Behnam expressed his view that ether is a commodity, he continued, adding that the New York State Attorney General asserted in a lawsuit last month that ether is a security. . “Obviously, an asset cannot be a commodity and a security, do you agree?” asked the lawmaker Gensler.
The SEC Chairman replied:
In fact, all securities are commodities under the Commodity and Exchange Act. The thing is, we are excluded goods, but I agree that a security cannot also be an excluded good and a listed good.
“How do you classify ether then?” McHenry questioned Gensler. When the SEC chairman tried to give a general answer about securities laws, the congressman pressed: “I ask you, sitting in your seat now, to make an assessment, under existing laws, is ether a commodity or a security?”
While Gensler insisted he wouldn’t discuss any specific tokens, the congressman pointed out that the SEC chairman had already talked about one token, bitcoin, and was now asking him to talk about ethereum. Gensler previously said that all cryptocurrency tokens, other than BTCare securities but will not mention any other symbols in particular.
Ignore the legislator’s question about ETH Specifically, Gensler stressed that there are 10,000 to 12,000 cryptocurrencies out there and proceeded to offer the same general explanation he has said several times:
If a group of entrepreneurs collects money from the public in anticipation of profits that depend on…
McHenry cut Gensler off mid-sentence and repeated this question: “I am asking about one. I am asking a specific question, Chief Gensler. I said this in private. It should not come as a shock to you that I am asking this question. Is ether a commodity or a security?”
Gensler replied:
And again, it depends on the facts, the law and if there is a group…
The congressman repeated his question after dismissing Gensler mid-sentence again: “I’m asking about the facts and the law that sits in your seat and the judgment you make.”
Mr. Gensler insisted, Chief, I guess you don’t want me to prejudge.
“But you prejudged this. You’ve taken 50 enforcement actions. We’re finding out as we go forward, as we file lawsuits, where people get Wells notices about what security is from your point of view and from your agency’s point of view. I ask you a very simple question about the second largest asset My number. What do you think?” Gensler replied:
My point is if there is a group of individuals in the middle that the audience is…
McHenry cut Gensler mid-sentence again and proceeded to ask his next question.
“Let me just ask a second question. Do you think it serves the market something that a commodity regulator should view as a commodity and a securities regulator as a security? Do you think that provides security and durability to the product? Do you think it provides consumer protection? “Do you think it serves the value of innovation? I think ‘no’ should be a very simple answer for you here. Uncertainty is bad, right?” McHenry told Gensler.
When the committee chair confronted Gensler about not answering his question on ETH, the SEC chairman replied: “I answer it generally because you don’t want me to dwell on any one set of facts and circumstances.”
The lawmaker continued, “Let me just take a step back. There is a lack of clarity here in the market. Can you at least agree with that?” Gensler replied:
I think the clarity is there. The law is clear.
“Well, let me be blunt about this. The market is not seeing it. Your regulatory actions and the CFTC’s regulatory feedback suggests that there is a great deal of uncertainty here. This committee intends to fix that uncertainty and provide a sound legal basis So,” McHenry stressed.
Many people have complained about the SEC, led by Gensler, which is taking an enforcement-focused approach to regulating the crypto sector. Congressman Warren Davidson recently revealed that he is introducing legislation to impeach the chairman of the Securities and Exchange Commission for a “long streak of violations.”
How about SEC Chairman Gary Gensler sidestepping a congressman’s question about whether ether is safe? Let us know in the comments section below.
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