As an experienced financial analyst, I find the allegations made by Representative Patrick McHenry against SEC Chair Gary Gensler concerning the classification of Ether (ETH) as a security to be troubling. The implications of this issue go beyond just the regulatory status of ETH and could have significant ramifications for the crypto industry as a whole.
According to Chairman of the US House Financial Services Committee, Patrick McHenry, SEC Chair Gary Gensler has been accused of deliberately misinforming Congress regarding the Securities and Exchange Commission’s (SEC’s) supposed efforts to label Ether (ETH) as a security.
In a post dated April 30th, Representative McHenry accused Gary Gensler of providing false information during his testimony before Congress. He based this allegation on statements made in a lawsuit filed by Consensys on the 25th of April.
In a complaint filed in the U.S. District Court for the Northern District of Texas, ConsenSys challenged the SEC’s conflicting stance on digital assets being classified as securities, focusing particularly on Ether. Leaked parts of the court documents revealed that the SEC initiated an investigation into ETH as a security back in March 2023.
In April 2023, Gensler testified before the House Financial Services Committee. When faced with inquiries from McHenry regarding who regulates Ether between the SEC and CFTC, Gensler evaded or changed the subject rather than providing a clear answer. His appearance implied that the SEC might have previously classified Ether as a security.
McHenry made it clear during the hearing that an asset can’t serve as both a commodity and a security. So I would like to know from you, occupying that seat right now, is Ether categorized as a commodity or a security?
If the Securities and Exchange Commission (SEC) is considering actions regarding Ether that may conflict with the Commodity Futures Trading Commission (CFTC), this could impact the approval or rejection of spot Ethereum exchange-traded funds (ETFs) on American exchanges. The SEC initiated the approval process for investment products connected to Ether futures in October 2023, with many anticipating a decision on a spot Ethereum ETF as early as May.
As a researcher, I’d encourage lawmakers to consider their role in advancing the Financial Innovation and Technology for the 21st Century Act (FIT21). This legislation aims to establish a clear regulatory framework for the interaction between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). McHenry’s recent call to action comes as FIT21 made its way out of Committee in July 2023, preparing it for a full vote on the House floor.
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2024-04-30 19:12