Bombshell! U.S. Congress Accuses: SEC Chairman "Intentionally Misleading" Severely Impacts Ethereum and Cryptocurrency Market Development

Patrick McHenry, Chairman of the U.S. House Financial Services Committee, has vehemently criticized Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC), over the "Ethereum investigation, hinting that Ether might be classified as a security", accusing him of deliberately misleading Congress.

Gensler's contradictory statements on Ether being classified as a security are at the heart of the lawsuit brought by blockchain software company Consensys against the regulatory body.

Gensler has come under fire once again for his views on cryptocurrencies, this time for claiming that "Ether is a security". He is accused of "misleading Congress" on the crucial issue of Ethereum's classification as a security, an accusation that could have profound implications.

The U.S. House Financial Services Committee, a respected authority on financial affairs, issued a statement accusing the SEC under Gensler's leadership of making contradictory statements about Ethereum's security status.

The U.S. Banking Committee, dissatisfied with these inconsistencies, claimed to be closely monitoring the SEC's excessive regulation of all digital assets.

All of this was put on hold during a hearing of the Financial Committee on the legal case between blockchain software company Consensys and the SEC. At the hearing, McHenry highlighted court documents that drew attention to Gensler's contradictory statements about Ether being classified as a security, contrary to the regulatory agency's previous stance.

He issued a statement further clarifying his point: "Just months after a federal judge sanctioned SEC enforcement attorneys for lying to the court, new evidence shows that Gensler himself misled Congress."

Sponsored Business Content

He continued, "In April 2023, while testifying before the Financial Services Committee, Gensler refused to answer questions about the SEC's classification of Ether. New court documents show that this was an intentional distortion of the committee's position."

The entire issue stems from the country's first Ether spot ETF application recently submitted to the SEC. McHenry emphasized the clarity of whether Ether is defined as a security or a commodity in his statement, claiming this lays the foundation for any further regulatory framework for cryptocurrencies.

He also stated that the SEC's constantly changing stance could significantly impact investors and companies.

McHenry wrote, "Classifying Ether as a security, contradicting Gensler's previous statements, is another example of the arbitrariness and capriciousness of the agency's enforcement approach to digital assets. This event highlights the urgency of Congress passing the bipartisan 21st Century FIT Act to provide a clear regulatory framework and strong consumer protection for the digital asset market."

He also claimed that the regulatory agency would not find favor with Republicans in the committee, who will demand that Gensler and his SEC leadership be held accountable for their regulatory overreach.

Furthermore, he mentioned that under Gensler's leadership, the SEC has not formulated clear laws, thus stifling the nation's innovation.

He criticized the SEC for not providing clear guidelines behind the status of cryptocurrencies like Ether, leaving U.S. consumers unprotected and risking national security.