The US Securities and Exchange Commission’s (SEC) fresh move against Ethereum Foundations left the crypto industry confused. In order to gain clarity over the ongoing scenario, the Republican members of the House Committee on Agriculture and House Financial Services Committee have penned a letter to the SEC chair Gary Gensler.

US SEC faces Committee’s wrath

According to the letter, the committee members had shown their concerns about Prometheum Inc.’s plans to provide custody services for Ethereum (ETH). The lawmakers highlighted that there is a lack of clarity in the SEC’s Special Purpose Broker Dealer (SPBD) regime. However, this fails to address Prometheum’s intent to custody an asset recognized as a non-security digital asset by both the SEC and CFTC.

The committee members had asked the Gensler to come clean and clarify the SEC’s take on the SPBDs’ ability to custody non-securities. It has even urged the chair to present its approach to SPBD non-compliance with the regulatory classification of ETH. 

As we dig in, the lawmakers through the letter had pointed out the public records where the Commodity Futures Trading Commission and the SEC came ahead to identify Ethereum as a non-security digital asset. They directly suggest that such actions would have some bad effects on the digital asset markets.

This crucial letter from the lawmakers came in when Ethereum recently went through a major Dencun upgrade. Ether is still tied on an upward rally as its price jumped by more than 13% in the last 7 days after bagging a gain of 60% in the past 60 days.

A much needed clarity

Ethereum after receiving several controversial remarks is still trading at an average price of $3,538, at the press time. It is still down by 26% from its all time high of $4,891 recorded on November 16, 2021. However, the biggest altcoin breached the $4k price level recently. ETH’s 24 hour trading volume is down by over 18% to stand at $16.3 billion.

The committee is led by Chairmen Glenn “GT” Thompson and Patrick McHenry, along with Representatives French Hill, Dusty Johnson, Tom Emmer, and Warren Davidson who raised these concerns.

The lawmakers even criticize the commission’s failure to define the term “digital asset securities”. They have asked the SEC to come up with clear rules or complete guidance for crypto linked marketplace with asset classification.