House’s McHenry Criticizes SEC Chair Gensler for Misleading Congress

• FSC Chair Patrick McHenry criticizes SEC Chair Gary Gensler for misleading Congress on Ether’s status as a security.
• A recent report states that the SEC approved the Ethereum 2.0 investigation on April 13, 2023, five days before Gensler’s testimony. 
• McHenry says Gensler remained silent to the committee’s questions even though he knew the SEC’s stance on ETH status.

House Financial Services Committee Chairman, Rep. Patrick McHenry, recently criticized Securities and Exchange Commission (SEC) Chair Gary Gensler for misleading Congress on the classification of Ether as security. He stated that Gensler refused to reply to FSC’s pertinent questions regarding the status of Ether during his testimony in April 2023. 

McHenry’s statements came on the heels of a recent report that identified the SEC’s contradicting stance on Ethereum’s status. The report stated that the regulators approved the Division of Enforcement’s “Ethereum 2.0,” an investigation into Ether’s status as a security, on April 13, 2023. 

Though the SEC approved the Ethereum 2.0 investigation 5 days prior to Gensler’s testimony before the House Financial Services Committee, he deliberately remained silent to the committee’s questions regarding Ether’s status. Reportedly, Gensler was reluctant to answer when FSC enquired whether the SEC considered ETH security. In his recent post, McHenry wrote, “New court filings show this was an intentional attempt to misrepresent the commission’s position.”

The committee believes this misrepresentation of reality is “yet another example of the arbitrary and capricious nature of the agency’s regulation.” They added, 

“Chair Gensler refused to answer direct inquiries about Ether’s status, and now we see it was part of an intentional strategy to misrepresent the SEC’s position. The controversy stems from Gensler’s handling of questions during a committee session in April, where he was pressed for clarity on the SEC’s stance on digital currencies, specifically Ether.”

In a subsequent post, the FSC asserted that such a classification would contradict SEC and Gensler’s previous statements. The committee added, “Republicans will continue to hold the SEC accountable for its regulatory overreach that is stifling innovation, leaving consumers unprotected, and risking our national security.”