This article in the title outlines everything wrong with the US government. I am a small government guy, myself, so I am coming at this from a little different perspective. First, the main points:

• Lawmakers said that despite a public record from both the SEC and the CFTC identifying ETH as a non-security digital asset, there is concern over the lack of transparency in the SEC’s SPBD regime and the potential regulatory implications of allowing such custody services.
• Highlighting the discrepancy between the SEC’s enforcement actions and the historical recognition of ETH as a non-security digital asset, the letter criticized the SEC for not providing comprehensive guidance or rules for the digital asset marketplace regarding asset classification.

Basically, these guys in congress think the SEC is not doing enough to classify and regulate ETH. Now, if you have read some of my previous post, you may think this is where I go off on government regulation, I mean two of my Blogs on this site are about the regulation of crypto. Not this time though. As I stated at the beginning, this is about the size of government, and because of that size, the impotence of congress. 

A brief history, the SEC was started after the Wall Street Crash of 1929. Ok, that was brief.

The Great Depression in general, started the exponential expansion of US Federal Programs, and almost 100 years laters, here we are.  You have a congress so ineffectual, that it is left writing letters to organizations it created begging them to do stuff. These organizations may or may not respond. We see it constantly, congress either can't or choses not to make decisions, and then passes it off to agencies they have created over the years to do it for them. They get to write letters and go on talk shows and say how they think things should be and they are fighting for their constituents, but, then never actually get anything done. They may even bring in someone from the SEC to the capital and argue you should do this or that, but in the end, they simply say to the people, "I tried, but, the SEC is doing what it wants, it is out of my hands."

In an actual representative republic, congress would tell these agencies exactly what to do and how it needs to be done.  It would not be left up to unelected bureaucrats to make decisions affecting the people. If congress can't handle the task, then the size of government has either gotten too big, or they are just not doing their job.