U.S.
Securities
and
Exchange
Commission
(SEC)
Chair
Gary
Gensler
has
been
accused
of
misleading
Congress
by
Rep.
Patrick
McHenry,
the
chairman
of
the
House
Financial
Services
Committee,
who
said
Gensler’s
agency
already
knew
it
considered
Ethereum’s
ether
a
security
before
he
attended
a
hearing
and
declined
to
answer
that
question.
“Chair
Gensler
refused
to
answer
questions
regarding
the
SEC’s
classification
of
ether,”
McHenry
said
in
a
statement
posted
on
X.
“New
court
filings
show
this
was
an
intentional
attempt
to
misrepresent
the
commission’s
position.”
The
classification
of
(ETH),
the
second-largest
cryptocurrency
by
market
cap,
is
a
major
question
hanging
over
the
U.S.
oversight
of
digital
assets,
and
it’s
being
fought
on
multiple
legal
fronts.
If
ETH
is
a
security
that
should
be
registered
and
regulated
by
the
SEC,
then
many
other
tokens
may
also
fit
that
definition.
Documents
in
Consensys’
newly
filed
lawsuit
against
the
SEC
describe
how
the
agency
was
pursuing
an
investigation
into
the
nature
of
ETH
days
before
Gensler
testified
in
April
2023.
Consensys
is
suing
the
agency
ahead
of
an
expected
SEC
enforcement
action.
Read
More:
SEC
Chair
Gensler
Declines
to
Say
if
Ether
Is
a
Security
in
Contentious
Congressional
Hearing
But
McHenry’s
argument
suggests
that
the
agency’s
investigation
equates
with
an
actual
policy
position.
Spokespeople
for
the
SEC
didn’t
immediately
respond
to
a
request
for
comment
on
McHenry’s
accusations.
According
to
the
SEC’s
investigations
manual,
an
investigation
“is
appropriate
and
necessary
to
determine
whether
a
violation
of
the
federal
securities
laws
may
have
occurred
or
may
be
occurring,”
crypto
attorney
Grant
Gulovsen
pointed
out
to
CoinDesk.
It’s
not
a
finding
in
itself,
so
the
SEC
may
not
have
made
a
formal
determination
on
how
ETH
should
be
categorized.
“I
agree
with
Consensys
that
if
the
SEC
determined
all
offers
and
sales
of
ETH
involved
securities
transactions
it
would
be
devastating
to
the
entire
crypto
industry,
but
since
the
SEC
hasn’t
actually
done
that
yet,
why
try
to
force
the
issue?”
Gulovsen
said.