Securities and Exchange Commission (SEC) Chair Gary Gensler did not give a direct answer when asked whether Ether, the native cryptocurrency of the Ethereum blockchain, is a security or a commodity at a congressional oversight hearing on Tuesday.
See related story: CFTC chair calls Ethereum a commodity, in contrast to SEC chair Gensler’s position
Fast facts
- Gensler directly addressed the House Financial Services Committee (HFSC) for the first time since October 2021, which was before the collapse of FTX and crypto-friendly banks, including Signature, Silicon Valley Bank, and Silvergate.
- Gensler did not give a clear and direct answer to Congressman Patrick McHenry, the committee chairman, who asked if Ether, the second-largest cryptocurrency by market capitalization, is a security.
- “Actually, all securities are commodities under the Commodity Exchange Act. It’s that we are excluded commodities. But I would agree that a security cannot be also an excluded commodity and an included commodity,” responded Gensler.
- Regulators and prosecutors have held contrasting views on how to classify Ether. The Attorney General of New York recently called it a security, but the Commodity Futures Trading Commission Chair Rostin Behnam argued that it is a commodity.
- Gensler hinted on multiple occasions that he may view cryptocurrencies based on the proof-of-stake consensus mechanism, such as Ether, as securities.
- In May 2022, Gensler publicly labeled Bitcoin, the world’s largest cryptocurrency by market cap, as a commodity.
- Gensler told the HFSC on Tuesday that the SEC needs more resources and bodies to regulate the crypto asset class.
- Late last month, Gensler testified before the Subcommittee on Financial Services and General Government and requested US$2.4 billion in funding from Congress for the agency’s operations, which includes its cryptocurrency crackdown.
See related story: SEC chair Gensler: No plans to ban crypto, says it’s ‘up to Congress’
(Updates to fifth and eighth graph)