Cryptocurrency market developments continue to make headlines, with the Chairman of the United States House Financial Services Committee, Patrick McHenry, accusing Securities and Exchange Commission (SEC) Chairman Gary Gensler of providing misleading information to Congress regarding the classification of Ethereum as a security.
In a post dated April 30, Representative McHenry claimed that Gensler deliberately deceived lawmakers during his testimony before the Committee. McHenry referenced allegations made by software development firm Consensys, which filed a lawsuit against the SEC on April 25.
Consensys pointed out inconsistencies in the SEC’s treatment of crypto assets, particularly Ethereum, in its initial complaint filed in the US Northern District of Texas Court. Unamended sections of the complaint were revealed in court documents on April 29, indicating that the SEC had launched an investigation into Ethereum as a security in March 2023.
Gensler appeared before the House Financial Services Committee in April 2023, where he either evaded or provided vague answers to McHenry’s direct questions about whether Ethereum falls under the jurisdiction of the SEC or the Commodity Futures Trading Commission (CFTC). The timing of his testimony suggests that the SEC may have already considered Ethereum as a security. McHenry made the following statement during the Committee hearing:
“If the SEC is pursuing a path that could lead to disagreement with the CFTC on Ethereum, it could have implications for approving or rejecting funds traded on US exchanges for spot Ethereum.”
The SEC started approving investment vehicles tied to Ethereum futures in October 2023, and there is anticipation that the Commission will respond to a spot Ethereum ETF application in May.
McHenry used this opportunity to urge lawmakers to support the passage of the Financial Innovation and Technology Act for the 21st Century (FIT21), which aims to establish clear rules between the CFTC and SEC. The legislation was approved by the Committee in July 2023 and is currently awaiting a full vote in the House.
Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.
