U.S. Rep. Patrick McHenry (R-N.C.) began with a brief timeline.
Back in 2018, said the chair of the House Financial Services Committee, at a Tuesday hearing, then-SEC Corporation Finance Director Bill Hinman stated that he believed Ether was not a security. Last month, CFTC Chair [Rostin] Benham expressed his view that Ether is a commodity. The state attorney general of New York asserted in a court filing last month that Ether is a security. Clearly, an asset cannot be both a commodity and security. Do you agree?
Gary Gensler, chair of the Securities and Exchange Commission, smirked.
Actually, he responded, all securities are commodities under the Commodity Exchange Act. Its that we are excluded commodities. But I would agree that a security cannot be also an excluded commodity and an included commodity.
McHenry didnt waver.
OK. How would you categorize Ether then?
I think, continued Gensler, that the general sweep of what Congress did, not just in the 30s but as
Im asking you, sitting in your chair now, to make an assessment under the laws as [they] exist: Is Ether a commodity or a security?
Without speaking to any one
I know. Youve repeatedly said youre not going to speak to one, except youve spoken to one: Bitcoin. So im asking you to speak to a second one, [with] the second-largest market cap.
For two years, Democrats gave @GaryGensler a pass for his disastrous agenda. It's time for accountability. From his destructive climate disclosure rule to his regulation by enforcement of digital assets, Chair Genslers agenda has weakened capital markets & stifled innovation. https://t.co/coo8kvmpYe
Patrick McHenry (@PatrickMcHenry) April 18, 2023
In speaking to the tokens, replied Gensler, theres 10 to 12,000. If theres a group of entrepreneurs
Im asking you about one.
Im asking you a specific question, Chair Gensler. I said this in private. This should be no shock to you Im asking this question: Is Ether a commodity or a security?
Another non-answer from Gensler that includes the facts and the law gets interrupted.
Im asking you about the facts and the law, sitting in your seat, and the judgement you are making.
Mr. Chair, Gensler answered, I think you would not want me to prejudge
But you have prejudged on this. Youve taken 50 enforcement actions. Were finding out as we go, as you file suit, as people get Wells Notices on what is a security in your view and your agencys view. Im asking you a very simple question about the second-largest digital asset. What is your view?
Another non-answer. Another interruption by a frustrated McHenry.
All right. So let me just ask a second question: Do you think it serves the market for an object to be viewed by the commodities regulator as a commodity and the securities regulator to be viewed as a security? Do you think that provides safety and soundness for the products? Do you think that provides consumer protection? Do you think it serves the value of innovation? I think no should be a very simple answer for you here. That uncertainty is bad, is it not?
And I think, Gensler responded, Congress has said that theres one agencythe Securities and Exchange Commissionunder this committee
And you wont answer my question, and youre the head of that agency. So give me a break. Come on.
McHenry later asked Gensler if they could at least agree on the existing lack of clarity in the marketplace.
I think that the clarity is there, Gensler said. The law is clear.
Answered McHenry: Let me be explicit about this: The market doesnt see it.
