Cryptocurrency market developments continue to make headlines as the Chairman of the United States House Financial Services Committee, Patrick McHenry, accuses 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 claims that Gensler intentionally deceived lawmakers during his testimony before the Committee. McHenry refers to recent 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, specifically Ethereum, in its initial complaint at the US Northern District of Texas Court. Portions of the filing were made public on April 29, revealing 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 classified Ethereum as a security. During the Committee hearing, McHenry made the following statement:
“If the SEC is pursuing a path that could create disagreement with the CFTC regarding Ethereum, it could have implications for the approval or rejection of funds traded on US exchanges for spot Ethereum. The SEC has been approving investment vehicles tied to Ethereum futures since October 2023, and it is anticipated that the Commission will respond to a spot Ethereum ETF application in May.”
Taking advantage of the situation, McHenry urges lawmakers to support the passage of the Financial Innovation and Technology Act for the 21st Century (FIT21), which aims to establish clear regulations between the CFTC and SEC. The legislation was approved by the Committee in July 2023 and is now awaiting a full vote in the House.
Disclaimer: The information provided in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and risks, and should conduct their own research.
