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


Gumbariya/Shutterstock modified by Blockworks


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

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


Upcoming Events

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. What you can expect: And more! Don’t miss out on the opportunity to be in the room when the future of crypto is decided. Join us and help shape the future of our […]

recent research

Research report - cover graphics-2.jpg


Base has doubled-down on its commitment to the Superchain vision, has shown early signs of success with nearly $400M in TVL, and has become home to novel dapps such as which has seen significant traction.


The SEC, in a Friday court filing, said it reserves its right to object to the plan from Celsius


Largely unnoticed until Monday, stakeholder Justin Sun confirmed a $8 million hack in a tweet


Crypto is that perfect edge for candidates to use to gain votes and campaign dollars


Coinbase can offer crypto custody, crypto buying and selling and crypto trading as part of the registration


The latest industry scandal has rattled Hong Kong’s ambition to become a global crypto hub as its main financial regulator ramps up measures designed to protect investors


Coinbase holds about 5% of the total bitcoin in circulation, according to on-chain analytics firm Arkham Intelligence