A group of 48 U.S. lawmakers, led by Representatives Patrick McHenry, Glenn Thomson, French Hill, Dusty Johnson, Tom Emmer, and Warren Davidson, have sent a letter to SEC Chairman Gary Gensler seeking clarity on whether ether (ETH) should be classified as a security. The letter highlights the potential negative implications of such a classification and the resulting confusion and uncertainty.
The letter emphasizes the SEC’s previous recognition of ETH as a non-security digital asset or digital commodity. However, the lawmakers expressed concern over Gensler’s refusal to acknowledge ETH as a non-security, despite the SEC’s approval of ETH-based ETFs and the CFTC’s regulation of ETH commodity futures products.
The letter highlights the potential consequences of classifying ETH as a security, including restricting CFTC-registered commodity derivative exchanges from listing and offering ETH futures. This could disrupt the existing ETH market participants, limit access to risk management tools, and potentially cause price disruptions. Furthermore, it could lead to violations of securities laws by existing CFTC-registered entities and registrants offering security futures products without proper registration.
The lawmakers posed several questions to Gensler, including whether ETH is considered a digital asset security, the SEC’s determination process and timing regarding ETH’s classification, and whether the SEC believes that CFTC-registered entities are violating federal securities laws by trading in ETH derivatives.
The letter requests Gensler’s response by April 9, 2024, signaling the urgency of the matter. The lawmakers aim to clarify ETH’s classification and mitigate the potential negative consequences of an SEC-imposed security classification on the digital asset marketplace.
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Source: Bitcoin.com
