U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said in a hearing on April 18 that he has never owned cryptocurrencies or digital assets.
SEC Chairman Does Not Own Crypto Assets
When asked by Representative Bryan Steil if he held digital assets, Gensler said:
“I don’t own any crypto assets…but all my assets are truly digital because they are held by broker-dealers.”
Gensler has repeatedly denied owning digital assets, noting that he never owned bitcoin. He also dismissed digital assets, saying they are “highly speculative.”
He later claimed to have digital bank accounts and brokerage accounts, “but no cryptocurrencies.”
Gensler was also asked if members of his team or his subject matter experts had digital wallets or digital assets. Gensler responded that, to the best of his knowledge and ethics, these individuals do not own digital assets.
Gensler made the statements during a hearing before the U.S. House Financial Services Committee in response to Representative Bryan Steil.
There have been concerns about Gensler’s potential bias against certain cryptocurrencies, since Gensler can selectively police assets.
However, Gensler’s alienation from the crypto industry could also be a problem. Finally, Steil accuses Gensler of “being in business … creating rules and regulations regarding digital assets” without personally owning any such assets.
Stein was just one of several House members who criticized Gensler at the hearing. The recent hearings represented dissenting views from Republican lawmakers, who currently hold the majority in the House.
Congressman Patrick McHenry urged Gensler to clarify ethereum’s status as a security. Meanwhile, as Bitcoin Magazine reported on April 17, Representative Warren Davidson has called for legislation to eliminate the SEC chairman and remove Gensler from that position.
Republican lawmakers also condemned the SEC’s heavy-handed approach to cryptocurrency regulation in an open letter. Gensler’s SEC invited digital asset companies to register with the agency, but ultimately did not provide a specific process, they said.
Is Ethereum a stock or a commodity?
With regard to Ethereum specifically, the SEC chairman was forced to answer how he correctly differentiates between crypto securities and crypto commodities and the difficulties financial firms have recently faced when accessing financial services electronically.
In his opening remarks, committee chair Patrick McHenry noted that Gensler and the Exchange Commission have launched “nearly 50 separate enforcement actions against digital asset firms” this year. The agency plans to expand enforcement with the requested $78 million in funding.
“At the same time, he declined to provide clear information on whether digital assets offered as part of an investment contract are subject to securities laws and, more importantly, companies. This should comply with those laws”.
In previous statements and interviews, Gensler has said that most crypto assets are securities, saying only that Bitcoin is a commodity. He declined to name anything other than the largest cryptocurrency — avoiding even directly answering classified questions about ethereum.
The same thing happened at Tuesday’s hearing. When McHenry asked whether Ether was a commodity or a security, Gensler simply said “it’s already clear because the law is completely clear and transparent.”
Gensler often cites the Howey test when asked to determine whether a digital asset is a security. Financial assets issued to raise capital with the expectation of a return based on the efforts of others are “investment contracts” under the test.
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