What The Hell Is Your Position on Ethereum, Gary Gensler?

Ethereum SEC cartoon ft. Gary Gensler

YEREVAN (CoinChapter.com) — Members of both the U.S. House Financial Services Committee and the House Agriculture Committee have a question for Gary Gensler, the chief of the U.S. Securities and Exchange Commission: What the hell do you think is Ethereum, eh?

Congress Challenges SEC: Can Prometheum Safeguard Ether?

On March 26, U.S. lawmakers sent a letter to Gensler. Among them were Patrick McHenry, the Chair of the House Financial Services Committee, and Vice Chair French Hill. They pressed the SEC to tackle the issue. The focus? Crypto firm Prometheum plans to provide custody services for Ether to institutions.

Regulatory Uncertainty Alert – TOBTC Tweet

Lawmakers Spotlight Confusion over ETH Classification

Lawmakers point out a conflict. They say the announcement contradicts the Commodity Futures Trading Commission’s (CFTC) view, which sees Ethereum as a “non-security digital asset.”

“The agencies have an extensive public record identifying ETH as a non-security digital asset.”

“There are multiple regulatory actions grounded in that position […] [Prometheum’s] action, if allowed to proceed, could have irreparable consequences for the digital asset markets.”

“SEC Oversight Callout by House Republicans” – Financial Services GOP Tweet

The SEC has hinted that it might label ETH as a security.

Read: Is Buying Ethereum Too Risky Against SEC’s Potential Crackdown?

Experts warn that the SEC’s stance could block the green light for spot Ether ETFs. Despite this, the SEC has said yes to Ethereum futures-linked investment products. These are already up and trading on U.S. exchanges.

The CFTC, meanwhile, sees cryptocurrencies such as Bitcoin and Ether as commodities. On March 26, it took legal action against KuCoin and its two founders for offering futures trading services in Ethereum, Bitcoin, and Litecoin.

“CFTC Labels Major Cryptos as Commodities in KuCoin Case” – 1ATH.Studio Tweet

The lawmakers added in the letter to Gensler:

“The SEC’s failure to propose a rule or provide comprehensive guidance that provides clear rules for the digital asset marketplace regarding asset classification has only exacerbated the uncertainty in the digital asset ecosystem.”

Regulatory Collision: CFTC and SEC at Odds

After Prometheum announced its plan to custody ETH in February, CFTC Chair Rostin Behnam spoke up. At a House Financial Service Committee hearing, he restated the CFTC’s view on Ether and warned about a clash with the SEC on digital asset regulations.

In November 2023, CFTC Commissioner Kristin Johnson laid out options for clear crypto rules. She pointed to solutions through the courts, company policies, or new laws from Congress.