The head of the US Securities and Exchange Commission has suggested that ether is a security

In an interview with CNBC, Securities and Exchange Commission Chairman Gary Gensler said Bitcoin is the only cryptocurrency he feels comfortable calling a commodity publicly.

On CNBC's Squawk Box, Gary Gensler reiterated his view that many cryptocurrencies are securities and remain "highly speculative asset classes."

"Many of these crypto financial assets have the characteristics of securities," and thus fall under the SEC's jurisdiction, he said. "This is ethereum prison key. The public, as investors, expect a return, just as they do when they invest in other financial assets called securities."

Gary Gensler did not acknowledge in the interview that ether is also a commodity, so he may be hinting at the idea that ether is, in fact, a security, a view that would put him at odds with the Commodity and Futures Trading Commission (CFTC), which regulates futures trading in ether as a commodity.

CFTC Chairman Rostin Behnam has repeatedly said he is "certain" that both bitcoin and ether are commodities.

Fortunately, the picture may be becoming clear. A new bipartisan bill called The Responsible Financial Innovation Act aims to give the CFTC oversight of the physical market for digital assets, and it also introduces new language and definitions to define digital assets. Specifically, it coined the term "ancillary assets," which refer to tokens offered to buyers under investment contracts rather than securities in nature.

Speaking at CoinDesk's Consensus 2022 conference, Rostin Behnam said he was "very encouraged" by proposed legislation in Congress that would give his agency more authority over the digital asset market.

"" One of the trickiest things we're going to do -- and I think they've solved it pretty well -- is declassify between merchandise and security.

But Gary Gensler and Rostin Behnam are not just waiting for the bill to pass, which is far from certain after all.

Referring to the hundreds of tokens currently on the market, Gary Gensler recently told the Financial Times that the SEC and CFTC are working on a "memorandum of understanding" that would require the former to pass on information related to cryptoassets representing commodities to the latter. Gary Gensler argued for "the same set of rules" with the SEC's joint digital assets regulator, saying that securities and commodities have become "intertwined" in the current trading environment.

"The same set of rules I'm referring to would protect all transactions, no matter what the combination is -- security tokens and security tokens, security tokens and commodity tokens, or commodity tokens and commodity tokens. If the industry is going to move forward, it's going to have to build better trust in these markets."

The report argues that such a rulebook would protect investors from fraud, manipulation and early trading.

"There are a lot of risks in cryptocurrencies, but there are also risks in the traditional securities market." Gary Gensler said.

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