SEC’s Mute Stance on Ether Classification was Misleading, Says Patrick McHenry

The Ether classification by the SEC has come under huge scrutiny. Patrick McHenry, The House Financial Services Committee Chairman, told Fox journalist Eleanor Terrett that new evidence reveals that Chair Gensler personally lied to Congress, just months after a federal judge punished SEC enforcement attorneys for lying to the court.

SEC’s Misleading Stance

According to Patrick McHenry, Chair Gensler declined to respond to inquiries about the SEC’s Ether classification during her testimony before the Financial Services Committee in April of last year. According to recent court documents, this was a deliberate attempt to distort the Commission’s viewpoint.

Ether’s classification as security goes against what Chair Gensler and the SEC have previously said, and this is just one more illustration of how the agency’s enforcement-based regulation of digital assets is arbitrary and capricious. This episode emphasizes how crucial it is that the bipartisan FIT for the 21st Century Act be passed by Congress to give the digital asset markets a clear legal framework and strong consumer protections.

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SEC Ether Classification as Security

According to a recent report, Gary Gensler, the chairman of the SEC, thinks Ethereum (ETH) was a security for the past year. According to a Fox Business article published on April 29, Gensler thought Ethereum was an unregistered security for at least a year. This is different from the Securities and Exchange Commission’s (SEC) earlier stances on Ethereum’s classification as a commodity.

As to the article, there could be additional information regarding the timeliness of the Commission’s purported classification of Ethereum as a security found in a recent court filing. Should the recently initiated inquiries indicate Ethereum as a security, this would go against the financial regulator’s earlier claims.

Consensys Alleges SEC of Taking Over Bitcoin Sector

Besides the Ether classification, Consensys filed a lawsuit in a Texas court following receipt of the SEC’s Wells Notice, claiming among other things that the Commission had changed its previous position.

The business claimed that the SEC was attempting to take over the Bitcoin sector. The second-largest cryptocurrency was not a security, according to a 2018 SEC report. In the wake of the Ripple scandal involving the Commission, this gave rise to accusations of partiality.

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