Gary Gensler the chairman of SEC was in front of Congress today answering questions about his controversial tenure.
Patrick McHenry, Chair of Financial Services Committee.
Regulators, prosecutors, and CFTC have all claimed that ether was a currency in the past (the CFTC) but they now won’t admit it (the SEC director of corporate finances, William Hinman said in 2018 that neither ether or bitcoin were securities).
Gensler spent considerable time telling the industry of digital assets that it has all the clarity that is needed in terms of regulation. It’s worthwhile to transcribing their exchange word for word so you can decide if Gensler made his point.
McHenry asked Gensler a number of very specific questions. One was about Ether (ETH), which is the native token for the Ethereum blockchain.
“Clearly an asset cannot be both a commodity and a security. Do you agree?”
“Ummm, I… I… it’s… actually all securities are commodities under the Commodity and Exchange Act, it’s that we’re excluded commodities, but I would agree that a security cannot also be an excluded commodity and an included commodity, I’m sorry chair, just to talk about the Commodity Exchange Act, more precisely.”
McHenry seemed to not think that the answer he gave was even a correct answer.
“He followed him up” “I’m asking you, sitting in your chair now, to make an assessment under the laws that exist: Is ether a commodity, or a security?”
“Without speaking to any one…” began Gensler.
“You’ve repeatedly said you won’t speak to one,” McHenry interrupted “But you’ve spoken to one: bitcoin. So I’m asking you to speak to a second one, with the second largest market cap.”
“In speaking to the tokens,” Gensler replied, “There’s ten to twelve thousand, if there’s a group of entrepreneurs…”
“I’m asking about one,” interjected McHenry. “I’m asking you a specific question, Chair Gensler. I said this in private, this should be no shock to you that I’m asking this question. Is ether a commodity, or a security?”
Gensler: “And again, it depends on the facts and the law on if there’s a group of individuals…”
McHenry: “I’m asking about the facts and the law, sitting in your seat, and the judgment you are making.”
Gensler: “And so, Mr. Chair, I think you would not want me to prejudge…”
McHenry was not having it. “But you have prejudged on this. You’ve taken 50 enforcement actions. We’re finding out as we go, as you file suit, as people get Wells notices on what is a security in your view and your agency’s view. I’m asking you a very simple question about the second-largest digital asset. What is your view?”
Gensler has refused to respond once again. “And my view is, if there’s a group of individuals in the middle of it, the public is entitled…”
McHenry moved on after giving up.
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