On Tuesday, Securities and Exchange Commission (SEC) Chairman Gary Gensler testified before the House Financial Services Committee about the SEC’s recent enforcement actions against the crypto business.
The chair was challenged for clarification on how he distinguishes between crypto securities and crypto commodities, as well as current obstacles for crypto companies in accessing financial services.
Committee head Patrick McHenry noted in his opening statement that Gensler and the Securities and Exchange Commission had initiated “almost 50 distinct enforcement proceedings against digital asset issuers” this year. The agency intends to expand enforcement with a $78 million budget request.
Gensler has previously stated and interviewed that the vast majority of crypto assets are securities, only expressly recognising Bitcoin as a commodity. Aside from the largest cryptocurrency, he has hesitated to mention names, even avoiding a direct answer about Ethereum’s classification.
When asked to decide whether a digital asset is a security or not, Gary Gensler usually refers to the Howey Test. A financial asset issued to raise funds with the expectation of profit depending on the efforts of others qualifies as a investment contract under the test.
Watch the full hearing video from here
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