SEC Chair Gary Gensler faced intense questioning about his regulatory approach to the digital asset ecosystem during a House Financial Services Committee hearing. Republicans on the committee criticized Gensler's strategy of enforcing regulations without providing clear guidelines for compliance, accusing him of disregarding the Commission's mandate to promote capital formation.

In particular, Representative Patrick McHenry grilled Gensler on the status of Ethereum, asking whether it should be classified as a security or commodity. Gensler struggled to provide a direct answer, stating that it "depends on the facts of the law." McHenry repeatedly pointed out Gensler's vague comments, noting his previous efforts to classify Bitcoin as a commodity and suggesting that there had been earlier private discussions on Ethereum.

During the hearing, McHenry called for legislation that would establish clear rules for cryptocurrency, a proposal that has been raised before. The debate over how to regulate digital assets is likely to continue, with the SEC playing a crucial role in shaping the regulatory landscape.