Regulatory Clarity? Gensler Can’t Give a Simple Yes or No on Ethereum

SEC Chair Gary Gensler says the digital asset industry has clarity — here’s that clarity, in full

OPINION
article-image

Gumbariya/Shutterstock modified by Blockworks

share

Gary Gensler, the chair of the SEC appeared before Congress today to answer questions regarding his controversial tenure.

Among the questioners: Chair of the Financial Services Committee, Patrick McHenry.

Regulators and prosecutors have been asserting, variously, that ether is a security (the attorney general of New York) or a commodity (the CFTC), or that it was a commodity in the past, but now they won’t say (the SEC’s director of corporate finance, William Hinman, said that neither ether nor bitcoin were securities in 2018).

Given that Gensler has spent considerable energy telling the digital asset industry that they have all the regulatory clarity they need, it’s worth transcribing the interchange between the two men word-for-word, so that you can judge for yourself if Gensler was clear.

McHenry asked Gensler some very specific questions, including this one, regarding Ether (ETH), the native token of 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 did not appear to think this answer was an answer at all.

He followed 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,” interrupted McHenry, “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 wasn’t 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?”

Once again, Gensler refused to answer. “And my view is, if there’s a group of individuals in the middle of it, the public is entitled…”

McHenry gave up and moved on.

There’s your regulatory clarity.

Now come in and register.

YouTube / GOP Financial Services

Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Bluefin possibly stands at an inflection point. The token is near an all-time low yet the protocol’s spot volume market share and derivatives exchange usage have been increasing month over month since its November launch. Given its current market position and the upcoming upgrades (for both Bluefin and SUI), there may be upside potential before the increased supply growth in December. However, strong opposition from existing competitors (like Cetus and Suilend), as well as new entrants (like Aftermath), pose key challenges to Bluefin’s medium-term success.

article-image

Top Committee Democrat Sen. Elizabeth Warren in her opening statement accused Atkins of “helping billionaire CEOs like Sam Bankman-Fried”

article-image

Introducing garbled circuits for enhanced privacy and regulatory compliance

article-image

Ross Ulbricht was a freedom maximalist building freedom tech, powered by Bitcoin

article-image

Solana validators can reap benefits including payments, votes and community clout

article-image

Sponsored

WalletConnect is cementing itself as the essential connectivity layer, ensuring wallets remain the entry point for billions of users

article-image

According to a legal filing, Galaxy Digital helped boost the price of LUNA while quietly selling its tokens