Patrick McHenry, Chair of the United States House Financial Services Committee, has accused Gary Gensler, Chair of the Securities and Exchange Commission (SEC), of deliberately misleading Congress regarding the classification of Ether (ETH) as a security. McHenry made these claims in a recent post, citing a lawsuit filed by Consensys against the SEC. The lawsuit, filed on April 25, highlighted inconsistencies in the SEC’s treatment of digital assets, particularly Ether. Recently disclosed sections of the court filing indicate that the SEC initiated an investigation into Ether as a security in March 2023.
Gensler’s appearance before the House Financial Services Committee in April 2023 raised suspicions about the SEC’s stance on Ether. During the hearing, McHenry questioned Gensler on whether Ether should fall under the jurisdiction of the SEC or the Commodity Futures Trading Commission (CFTC), but Gensler evaded a direct answer. McHenry argued that an asset cannot be both a commodity and a security, pressing Gensler to clarify Ether’s classification.
The potential conflict between the SEC and the CFTC over Ether may have implications for the approval or denial of spot Ether exchange-traded funds (ETFs) on U.S. exchanges. While the SEC has been approving investment products linked to ETH futures since October 2023, the decision on a spot Ether ETF is expected to be made in May, with some experts expressing concerns about the SEC’s position.
Taking advantage of the situation, McHenry urged lawmakers to support the Financial Innovation and Technology for the 21st Century Act (FIT21), which aims to establish clear regulatory guidelines between the SEC and CFTC. The bill has already progressed out of Committee and is scheduled for a full floor vote in the House of Representatives.
In other news, 68% of Runes are currently experiencing losses, leading to questions about whether they truly offer an upgrade for Bitcoin.