The House Financial Services Committee is holding a hearing to perform oversight of the Securities and Exchange Commission. Republicans on the committee have stated that they are dedicated to holding Chair Gensler responsible for his strategy of regulating the digital asset ecosystem through enforcement, his reckless regulatory agenda, and his disregard for the Commission’s capital formation mandate.
When questioned about the status of Ethereum as to whether it is a security or commodity. Gensler falters before the house.
SEC Chair Gary Gensler Gets Grilled On Crypto Regulation In The U.S. House Hearing
In his opening remarks, Representative Patrick McHenry brought up the commission’s “punishing” of companies who deal in digital assets through regulation and enforcement without a clear route to compliance. The congressman renewed proposals for legislation that would provide “clear rules of the road” for cryptocurrency.
Further, to Chairman McHenry’s dismay, the SEC Chair evaded a direct response when Gensler inquired if Ethereum (ETH) was a security or a commodity. The Chair of the House Committee repeatedly questioned Gensler about ETH in particular given the 50 enforcement actions, to which Gensler attempted to respond in a generic manner by saying, “It depends on the facts of the law.”
Gensler’s vague comments were repeatedly highlighted by McHenry, who cited the SEC chair’s desire to classify Bitcoin as a commodity and hinted at earlier, private discussions on ETH before the hearing.
“Clearly an asset cannot be both a commodity and a security,” said McHenry. “I’m asking you, sitting in your chair now, to make an assessment under the laws as exist, is Ether a commodity or a security?”
“You have pre-judged on this: you’ve taken 50 enforcement actions. We’re finding out as we go, as you file suit, as people get Wells notices, on what is security in your view, in your agency’s view.”
Gensler had previously stated in his pre-hearing testimony that cryptocurrency intermediates were engaging in securities transactions and should register with the SEC. An all-Republican coalition of lawmakers challenged this position in a letter denouncing the SEC’s viewpoints. Regulatory frameworks that are incompatible with the underlying technology and inapplicable to laws governing the issuing of securities, according to the letter, were imposed on crypto businesses by the SEC.
Community Reactions
The crypto community, which has long criticized Gary Gensler’s leadership of the SEC and its policies, has praised the inquiries made by Rep. Patrick McHenry.
Some have said that Gensler ought to be removed from his role as SEC chairman immediately and should be replaced by somebody with more industry knowledge.
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