Lawmakers from the United States House Financial Services Committee and House Agriculture Committee have expressed concerns about the Securities and Exchange Commission’s (SEC) approach to handling Ether (ETH).
In a letter dated March 26 and addressed to SEC Chair Gary Gensler, lawmakers such as Patrick McHenry, Chair of the House Financial Services Committee, and French Hill, Vice Chair, urged the commission to address the plans of crypto firm Prometheum to offer institutional custody services for Ether. They argued that this announcement contradicts the stance of the Commodity Futures Trading Commission (CFTC), which recognizes ETH as a “non-security digital asset” within its realm.
The lawmakers stated, “[…] the agencies have publicly identified ETH as a non-security digital asset. There have been various regulatory actions based on that position […] [Prometheum’s] action, if allowed to proceed, could have significant consequences for the digital asset markets.”
According to recent claims made by the SEC, it appears that the commission intends to classify ETH as a security. This position has raised concerns among experts who believe that it could result in the denial of approval for spot Ether exchange-traded funds. However, the SEC has already given the green light for investment vehicles tied to ETH futures to be listed and traded on US exchanges.
In contrast, the CFTC recognizes many cryptocurrencies, including Bitcoin (BTC) and Ether, as commodities. On March 26, the commission took civil enforcement action against KuCoin and two of its founders, asserting that ETH, BTC, and Litecoin (LTC) are commodities and that the exchange’s actions fall under the CFTC’s authority.
In their letter to Gensler, the lawmakers added:
“Following Prometheum’s ETH custody announcement in February, CFTC Chair Rostin Behnam reiterated the commission’s position on Ether during a House Financial Service Committee hearing, warning of a potential conflict with the SEC over digital asset regulations. In November 2023, CFTC Commissioner Kristin Johnson proposed several potential paths towards regulatory clarity for crypto, including legal action, company policies, and congressional legislation.”
Magazine:
US law enforcement agencies are intensifying their efforts to combat cryptocurrency-related crimes.