Popular cryptocurrency exchange, Coinbase has replied to the Securities and Exchange Commission (SEC) over the launch of a spot Ethereum Exchange-Traded Fund (ETF). Coinbase's response was made via a social media post from its Chief Legal Officer, Paul Grewal.
According to him, the crypto exchange has filed an official 27-page response, comprising 96 citations, to support the approval of the proposed Grayscale Ether Trust (ETHE) ETP.
Per Paul Grewal's response, he dished out five reasons why Coinbase is advocating for the Ethereum ETF from the Security and Exchange Commission (SEC). Here are the reasons below;
Paul Grewal used the approval of a Bitcoin ETF as an example of why the SEC should give way for the launch of an Ethereum ETF. According to the Coinbase CLO, both Bitcoin and Ether are similar in terms of maturity and size of the market, he said;
"The economics show that ETH is as resilient as BTC in satisfying the Commission's standard for ETP approvals."
He gave this reason to show the SEC why it should take a similar approach toward Ethereum.
Among Paul Grewal's series of tweets, the importance of Ethereum's blockchain technological and operational security mechanisms.
The shift towards Proof of Stake is portrayed as a substantial bolstering of Ethereum's security measures, mitigating its vulnerability to fraudulent activities and manipulation.
This technological resilience stands as a pivotal point in Coinbase's advocacy, emphasizing the trustworthiness and steadfastness of ETH as a foundational asset for an ETF.
Coinbase CLO's main reason for the approval of a spot Ethereum ETF is based on the fact that ETH is a commodity rather than a security.
He wrote: "ETH is not a security…before and after the Merge, the SEC, the CFTC, and the market have treated ETH not as a security but a commodity,".
According to Paul, Coinbase considers the Ethereum market to be dynamic due to its tight spreads, depth, and liquidity.
Paul Grewal stated; "ETH's market depth, tightness of spreads, and price correlation across spot markets are highly indicative of a market resilient to fraud and manipulation."
This argument will give the SEC the confidence to approve a spot Ethereum ETF due to market stability, allowing investors to operate without substantial risks.
Paul Grewal ended the argument by highlighting the agreement on surveillance-sharing with the Chicago Mercantile Exchange (CME). According to Coinbase, the agreement is a means to have comprehensive market oversight that will facilitate the sharing of details through its surveillance of the CME ETH futures mark.
At press time, Ethereum (ETH) is currently trading at $2980. Coinbase has meticulously crafted its submission to the SEC, integrating legal precedent, technical security assessments, and market stability analyses to advocate for the approval of a spot Ethereum ETF. Standard Chartered forecasts SEC approval for an Ethereum ETF by May 23, potentially triggering a surge in ETH price to $4,000.