Patrick McHenry accused Gary Gensler of misleading US lawmakers on air.
US House Financial Services Committee Chairman Patrick McHenry accused Securities and Exchange Commission Chairman Gary Gensler of knowingly misleading Congress over the regulator's attempt to quietly classify Ether (ETH).
In an April 30 X post, Rep. McHenry testified before the committee that Gensler deliberately misled lawmakers. The US lawmakers cited the claims in a recent lawsuit filed by software development firm Consensys, which filed a lawsuit against the SEC on April 25.
Consensys' initial complaint in the United States District Court for the Northern District of Texas highlighted public disagreements over the SEC's approach to digital assets as securities, specifically Ether. Unredacted portions of the filing appeared in a court document on April 29, suggesting the SEC may have launched a March 2023 investigation into ETH as a security.
Gensler appeared before the House Financial Services Committee in April 2023, fielding direct questions from McHenry about Ether falling under the purview of the SEC or the Commodity Futures Trading Commission (CFTC). The timing of the testimony suggested that the SEC might consider Ether a security.
“Clearly, an asset cannot be a commodity and a security,” McHenry said at the committee hearing. “I ask you, now sit in your chair […] Is ether a commodity or a security?”
Related: SEC Spot Ether ETF Concerns Unfounded, Consensys Asserts
If the SEC is pursuing a potentially adversarial path with the CFTC on Ether, it may have problems approving or banning Ether exchange funds on US exchanges. The SEC began approving investment vehicles tied to ETH futures in October 2023, with many experts predicting the commission to rule on the Ether ETF in May.
McHenry used the opportunity to urge lawmakers to support the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) to establish clear rules of the road between the CFTC and the SEC. The bill is out of committee in July 2023 and is set for a full vote in the House of Representatives.
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