Gary Gensler Dodges Question On Whether Ether Is A Security Or Commodity

Key Points:

• US House Financial Services Committee chair criticizes SEC’s regulation by enforcement approach towards digital asset firms.
• Representative McHenry presses SEC chair Gary Gensler for a definitive answer on whether Ether is a security or commodity.
• Lawmakers continue to debate how to regulate cryptocurrencies in the United States.

On April 18th, the United States House Financial Services Committee held an oversight hearing on the Securities and Exchange Commission (SEC) and its leadership over digital assets. Gary Gensler said the SEC considers Bitcoin a commodity, but refused to pin down Ether.

During the hearing, Patrick McHenry, the chair of the committee, criticized the SEC and its leadership for “punishing” digital asset firms through regulation by enforcement without a clear path to compliance.

During an SEC oversight hearing, Representative McHenry criticized the commission for punishing digital asset firms without a clear path to compliance. He emphasized the need for clear rules for crypto through legislation and pressed SEC chair Gary Gensler on whether Ether (ETH) qualified as a security or commodity. McHenry was dissatisfied with Gensler’s responses that lacked specifics, citing his willingness to label Bitcoin (BTC) as a commodity and hinting at private discussions on ETH prior to the hearing.

Representative Maxine Waters, the House committee’s ranking member, questioned the SEC’s enforcement capabilities. Gensler assured the committee that the commission had the means, the authority, and the will to bring crypto firms into regulatory compliance.

This hearing highlights the ongoing debate about how to regulate cryptocurrencies in the United States. While some lawmakers believe that clear rules are needed to protect investors, others are concerned that over-regulation could stifle innovation in the crypto industry.

The classification of cryptocurrencies as either securities or commodities is a critical issue for the SEC. If a cryptocurrency is classified as a security, it must comply with federal securities laws, including registration with the SEC. On the other hand, if a cryptocurrency is classified as a commodity, it falls under the jurisdiction of the Commodity Futures Trading Commission (CFTC), which has a lighter regulatory touch.

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