In a notable move, the Coinbase team has urged the U.S. Securities and Exchange Commission (SEC) to greenlight Grayscale’s application for a spot Ethereum (ETH) ETF.
Paul Grewal, Coinbase’s chief lawyer, emphasized the importance of approving Grayscale’s application by facilitating the preliminary conversion of the ETH trust into a tradable instrument. The company actively engaged with the SEC, presenting a comprehensive rationale encompassing legal, technical, and economic justifications to support Grayscale’s Ethereum spot ETF launch.
Grewal underscored Ethereum’s robust governance model, particularly highlighting its Proof of Stake mechanism, which exhibits strong characteristics across ownership concentration, consensus, liquidity, and governance. These features, he argued, mitigate risks associated with fraud and manipulation, bolstering the case for an Ethereum spot ETF.
Coinbase’s advocacy aligns with its commitment to fostering innovation and cultivating a transparent, secure, and inclusive financial ecosystem within the cryptocurrency space. The company remains dedicated to maintaining an open dialogue with regulators and exploring regulatory solutions to advance the cryptocurrency landscape.
The SEC recently postponed its decision on Grayscale’s Ethereum ETF application until March 10, citing the need for additional review. Commission Chairman Gary Gensler emphasized the constraints imposed by approving a spot ETF solely for Bitcoin, a factor that also impacted BlackRock’s similar bid for a spot crypto ETF.
Craig Salm, head of legal at Grayscale, expressed optimism regarding the SEC’s potential approval of an Ethereum spot ETF, projecting a likely approval in the summer of 2024.
Coinbase’s vocal support for Grayscale’s Ethereum spot ETF underscores the growing demand for diversified cryptocurrency investment products and reflects the industry’s push for regulatory clarity and innovation.
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