Coinbase Advocates for Approval of Ethereum ETF in Response to SEC
Coinbase, one of the leading cryptocurrency exchanges, has submitted a comprehensive response to the Securities and Exchange Commission (SEC) regarding the proposed Grayscale Ether Trust (ETHE) Exchange-Traded Fund (ETF). The submission includes legal, technical, and economic rationale for the approval of the ETF.
Ethereum’s Classification as a Commodity
Coinbase argues that Ethereum (ETH) should be classified as a commodity rather than a security. This aligns with how regulatory bodies and market participants view ETH and is crucial for the SEC to consider approving an ETF based on ETH.
Precedent Set by Bitcoin ETF Approvals
Coinbase uses the SEC’s previous approval of Bitcoin ETFs as a precedent to advocate for consistent treatment for Ethereum. The market resilience and maturity of both Bitcoin and Ethereum support this argument.
Technological and Operational Security of Ethereum
The submission highlights Ethereum’s technological and operational security mechanisms, particularly after the transition to Proof of Stake. Coinbase emphasizes that this enhances Ethereum’s security, reducing susceptibility to fraud and manipulation.
Market Dynamics and Resilience
Coinbase presents an analysis of Ethereum’s market dynamics, including depth, liquidity, and spread tightness. This analysis showcases ETH’s market stability and its ability to support an ETF without introducing significant risks.
Surveillance-Sharing Agreement and Market Oversight
Coinbase underscores its surveillance-sharing agreement with the Chicago Mercantile Exchange (CME) as a mechanism for comprehensive market oversight. This agreement facilitates monitoring and prevents fraudulent practices in the ETH market.
Hot Take: Will SEC Approve an Ethereum ETF?
According to Standard Chartered, there is a prediction that the SEC will approve an Ethereum ETF by May 23, potentially leading to a price surge for ETH. However, head of Grayscale ETFs, Dave LaValle, believes there is only a 50% chance of approval in May. At the time of writing, ETH is trading at $2,961.
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