Ethereum: SEC Chair Allegedly Lied to Congress

Gary Gensler, the man behind crypto regulations in the United States, has been grilled by Congress. Accused of recurrent abuses of power in his regulatory approach, he now faces allegations of lying about Ethereum. Patrick McHenry, a forthright representative, did not mince words regarding him.

Gensler in the Storm: Compromising Revelations

The position of Gensler on Bitcoin is as clear as noodle soup: he neither wants to consider it a “security” nor a “commodity.” And what about Ethereum? The same vagueness prevails. Nevertheless, heavyweights of the crypto sphere, like Ethereum co-founder, Joseph Lubin, have come out to block any attempt to classify ETH as a security.

#ICYMI: New court filings indicate that @SECGov Chair Gary Gensler knowingly misled Congress when pressed on the classification of #ETH at a @FinancialCmte hearing to conduct oversight of his agency.

Read my full statement pic.twitter.com/8osMpbY6Iu

— Patrick McHenry (@PatrickMcHenry) April 30, 2024

The Chairman of the House Financial Services Committee, Patrick McHenry (R-NC), has dived into the heated arena between financial regulators and the cryptocurrency industry. He sharply accused SEC Chairman, Gary Gensler, of “misleading Congress” about the agency’s position on Ethereum’s cryptocurrency.

These revelations come after internal exposure that the SEC has been considering Ethereum (ETH) as an unregistered security for over a year, according to documents leaked in a lawsuit against the regulator by the Ethereum software company Consensys.

Despite ETH’s significance in the cryptographic landscape as the second largest crypto asset by market capitalization, after Bitcoin, Mr. Gensler has stubbornly refused to comment on the SEC’s stance on Ethereum. During a congressional hearing last year, he carefully avoided McHenry’s direct questions about the nature of ether as a security.

A Hide-and-Seek Game with Ethereum

In the arm-wrestling between regulators and crypto players, a new episode surfaces. According to the recent lawsuit filed by Consensys against the SEC, the agency greenlit subpoenas regarding several crypto-assets, including ETH, just five days before thunderstruck.

However, beware, an SEC order is not a verdict in itself, but rather the kick-off of an investigation, as highlighted by a source close to the case.

McHenry, for his part, blasts this apparent duality between the SEC’s public words and its behind-the-scenes maneuvers on ETH. An illustration, according to him, of blatant arbitrariness in the regulation of digital assets by the agency. Moreover, it would not be in its interest to classify this crypto as a security.