Former CFTC Chair Massad Also Can’t Say if ETH Is a Security

Another House subcommittee calls on Congress and other agencies to get it together on crypto policy

article-image

Former CFTC Chair Tim Massad | Brookings Institution/"Timothy Massad" (CC license)

share

The House Committee on Agriculture Subcommittee on Commodity Markets, Digital Assets and Rural Development gathered Thursday to discuss “regulatory gaps” in cryptocurrency spot market regulation. 

The conversation revolved around token classification: Are cryptocurrencies securities or commodities? Both sides of the aisle expressed interest in making the passage of a comprehensive legislative framework a priority.

Subcommittee Chair Dusty Johnson, R-S.D., kicked off the conversation by emphasizing the need for innovation; we need to ensure “the next Ethereum” is able to emerge, he said. Johnson added that bipartisan cooperation is key, and the CFTC, SEC and state banking regulators also need to be a part of the conversation around spot market policy.

Hearing witness former CFTC Chair Timothy Massad used his prepared testimony to advocate for what he called an “alternative approach” to the crypto token classification issue: Congress should direct the SEC and CFTC to “develop joint rules” to determine what constitutes both commodities and securities. 

The SEC’s current regulation-by-enforcement strategy is time consuming and inadequate; court case precedent is not enough clarity, Massad added. 

While crypto fans can certainly get behind this opinion, Massad cannot answer one burning question from the industry: Is ether a security or a commodity?

“I don’t have enough information,” Massad said in response to the question posed by Rep. Zach Nunn, R-Iowa. 

“The concern about ether…was in the Merge, where they changed the system of validating transactions, there seemed to be a foundation, a group of people involved in that…is that, under the Howey test, a common enterprise?,” Massad added. 

It’s the same query SEC Chair Gary Gensler himself could not answer last week before the House Finance Services Committee

Rep. Warren Davidson, R-Ohio, asked Gensler if ether was a security, “yes or no,” during last week’s hearing. Gensler started to answer, without a ‘yes’ or ‘no,’ and was cut off by Davidson. 

The House Agriculture Committee and the House Financial Services Committee, chaired by crypto-friendly Patrick McHenry, R-N.C., are set to hold a joint hearing on digital assets next month, Johnson said.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit