Five SEC Commissioners to Testify before Congressional Committee

The upcoming testimony of the US SEC Commissioners might involve talks about Ethereum and its securities status.

Key Notes

In an unusual twist, 5 SEC Commissioners will testify before a Congressional Committee.Conversations about Ethereum’s security status might come up.The future of the SEC leadership currently hangs in the balance..

Five United States Securities and Exchange Commission (SEC) commissioners are scheduled to testify before the House Financial Services Committee next week. It was earlier suspected that Gary Gensler, the agency’s chairman, would be the only person to testify. However, FOX Business Journalist Eleanor Terrett took to X to announce that the entire SEC leadership will testify.

SEC Chair Violates Federal Law

The scheduled ex-SEC officials include Dan Gallagher, an SEC Commissioner from 2011 to 2015, and Michael Liftik, a one-time Deputy Chief of Staff to former SEC Chair Mary Jo White. Gallagher is the Chief Legal Officer at Robinhood Markets, while Liftik is a Partner at Quinn Emanuel Urquhart & Sullivan, LLP.

In the last five years, this is the first time that all five of the SEC’s commissioners will go before the House Financial Services Committee at once. It coincides with when Gensler faced an intense probe for hiring some people illegally. He is being accused of violating federal law by tampering with the hiring exercise.

The SEC Chair allegedly prioritized political affiliations in recruitment, favoring applicants from a particular faction. This illegal act is against the Civil Service Reform Act of 1978. Lawmakers are keen on resolving this case, and there are already reports that Gensler may lose his job as the investigation progresses.

The SEC Chair must still appear separately before the House next Wednesday.

Several entities are surprised by the information that five SEC commissioners will be present for the agency’s testimony. Even crypto lawyer MetaLawMan took to X to express his astonishment while speculating whether Patrick McHenry, the House Financial Services Committee Chair, will visit the subject of Ethereum’s security status with the SEC Chair.

Is Ethereum Securities or Commodity?

The discussion about whether Ethereum is a security or a commodity has gone on for several years. A few months ago, just before the SEC greenlighted spot Ethereum ETFs, MetaLawMan referenced the time when New York Attorney General (NYAG) Letitia James stated that Ethereum is a security. The NYAG likened ETH to Terra (LUNA) and associated algorithmic stablecoin UST, which crashed in 2022.

James further described Ethereum as a speculative asset that relies on the efforts of third-party developers to generate profits for its holders.

When the SEC eventually approved the spot Ethereum ETF offering for trading in June 2024, the altcoin’s categorization seemed clearer. However, the SEC’s Chair’s perception of the second-largest cryptocurrency by market cap remains clouded.

For the lack of clarity that clouded his tenure, many crypto enthusiasts are looking forward to Gensler’s exit from the Commission. Should Gensler be ousted from his position as SEC’s Chair, MetaLawMan sees the possibility of SEC Commissioner Hester Peirce serving in an unofficial position as the leader of the markets regulator.

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