Gary Gensler Refuses to Classify Ethereum as a Commodity Denies Regulatory Opacity Violating the Law is Not the Same as Disliking It
SEC Chairman Gary Gensler revealed at a budget hearing that the final approval for the Ethereum spot ETF is expected to be completed this summer. Additionally, he once again complained about the widespread non-compliance in the crypto industry and avoided answering whether Ethereum is a commodity.
Even as the Ethereum spot ETF is set to launch officially, the stance of the two major regulatory agencies in the United States continues to leave the attributes of the world’s second-largest cryptocurrency in a gray area.
When asked whether Ethereum is a commodity, Gensler did not provide a clear answer, maintaining the SEC’s uncertain position on the asset; whereas CFTC Chairman Rostin Behnam explicitly stated that Ethereum is a commodity.
Although Gensler has repeatedly stated that most digital assets should be considered securities, he refused to point out which assets fall into which category, except for those listed in enforcement actions.
Senator Hagerty urged the SEC to focus more on clarity in the crypto industry at the hearing, believing that there is still uncertainty in many aspects. In response, Gary Gensler stated, “Breaking the law and not liking the law is different from lacking clarity.”
Gensler further noted that while not all crypto assets are securities, some fall under the jurisdiction of the CFTC, but crypto assets that are securities are obligated to disclose information to the public, and he reiterated that most tokens are unregistered and violate securities laws.
Gensler expressed, “The crypto industry turns a blind eye to regulations, and CFTC is not yet prepared to manage a disclosure-based regulatory system because its responsibilities differ from the SEC’s.”
CFTC Chairman Rostin Behnam explained that if directed by Congress, CFTC should have more responsibility for regulating crypto trading, and currently lacks some necessary regulatory authority. He mentioned the efforts to ban election contracts on prediction markets like PredictIt, Polymarket, Zeitgeist, and Kalshi.
He stated, “What we least need now is to commodify elections. This clearly violates existing laws, and we are taking steps to ensure that these election contracts are prohibited.”
