SEC Chair Gensler Accused of Misleading Congress on Ethereum Classification

According to Chairman Patrick McHenry (NC-10) of the House Financial Services Committee, new evidence suggests that Gensler intentionally misled Congress regarding the classification of Ethereum (ETH).

Key points:

• Court filings show Gensler’s testimony contradicts the SEC’s position on ETH.
• ETH being classified as a security contradicts previous SEC statements.
• Republicans vow to hold the SEC accountable for regulatory overreach.
• Gensler’s actions are seen as stifling innovation and risking national security.

Just months after a federal judge sanctioned SEC enforcement lawyers for lying to the court, McHenry asserts in a committee statement that new evidence has emerged that demonstrates Gensler’s own deceptive conduct.

During testimony prior to the Financial Services Committee, Gensler allegedly declined to address questions on the SEC’s classification of Ethereum. This is in spite of the agency’s recent court filings, which show that ETH should be classified as a security.

Also read: Crypto Losses From Hacks And Scams Hit Record Low In April: CertiK

McHenry pledged to hold Gensler accountable

This contradiction has raised concerns among committee members, who view the classification of ETH as a security as a direct contradiction to previous statements made by both the SEC and Gensler himself.  

McHenry and his fellow Republicans have pledged to hold Gensler and the SEC accountable for what they perceive as regulatory overreach. They argue that the agency’s enforcement approach to digital assets is not only arbitrary and capricious but also risks stifling the growth of a promising new sector.

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The chairman’s statement underscores the urgency of passing bipartisan legislation, such as the 21st Century FIT for the 21st Century Act.

This aims to provide a clear regulatory framework and robust consumer protections for digital asset markets. Without such measures, McHenry warns that American consumers will remain unprotected. He also mentioned that the nation’s position as a leader in financial innovation will be jeopardized.