48 Congressmen Reach Out to SEC Chairman

48 American Congressmen have sent a letter to the Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, urging him to clarify whether Ether should be classified as a security. The letter noted that "the adverse effects that may arise from the SEC's classification of ETH as a digital security will impact the digital asset market both in the short and long term."

Congressmen Express Concern

Members of Congress have expressed concerns regarding the classification of Ether, especially after the announcement by Prometheum Inc. that its subsidiary will offer ETH custody services to institutional clients later this month. The letter was signed by 48 congressmen, including Patrick McHenry, Glen Thomson, French Hill, Dusty Johnson, Tom Emmer, and Warren Davidson.

The letter emphasized that both the SEC and the Commodity Futures Trading Commission (CFTC) have long recognized ETH as a digital asset that is not a security or digital commodity. However, congressmen noted that SEC Chairman has consistently refused to confirm this fact recently. In their letter, they reminded that during the hearing before the House Financial Services Committee in March 2023, Gensler did not respond to questions regarding the classification of Ether as a commodity.

Congressmen also pointed out the potential consequences of classifying ETH as a digital security by the SEC. They highlighted that it could limit the ability to offer futures contracts on ETH by exchanges registered with the CFTC. Additionally, such action could jeopardize existing ETFs and lead to market disruptions.

Awaiting Response

The letter concludes with a request to Gensler for a response to a series of questions regarding the classification of Ether by the SEC, and it is expected that the response will be provided no later than April 9, 2024. The decision by the SEC on this matter is also expected to have far-reaching implications for cryptocurrency markets and investors.