America’s Largest Crypto Exchange Meets SEC Over Grayscale’s Proposed ETH ETF
Last week, publicly-listed cryptocurrency exchange Coinbase met with the Securities and Exchange Commission (SEC) to discuss Grayscale’s proposed spot Ethereum (ETH) exchange-traded fund (ETF). Coinbase presented its views on the potential market manipulation concerns and emphasized the comprehensive surveillance-sharing agreement it has with the Chicago Mercantile Exchange (CME) to detect fraud and manipulation. The presentation highlighted that spot markets for ETH are resilient to fraud and manipulation due to the mechanisms in place to limit susceptibility. In January, the SEC approved 11 spot Bitcoin ETFs, leading Grayscale and other financial institutions to seek approval for an ETH ETF.
Grayscale Aims for an ETH ETF Approval
Crypto fund manager Grayscale filed an application with the SEC in October to convert its Grayscale Ethereum Trust (ETHE) into a spot ETH ETF. This proposed ETF would allow investors direct exposure to Ethereum by trading shares that track its price on a stock exchange. Grayscale was one of the fund managers that received approval from the SEC for a spot Bitcoin ETF, converting its popular Bitcoin Trust into one. Now, along with other reputable financial institutions, Grayscale seeks SEC approval for an ETH ETF.
Coinbase’s Presentation on Market Manipulation Concerns
Coinbase’s presentation focused on addressing potential market manipulation concerns regarding Grayscale’s proposed ETH ETF:
- The comprehensive surveillance-sharing agreement with CME will assist in surveilling for fraud and manipulation.
- Spot markets for ETH exhibit resilience against fraud and manipulation.
- ETH has mechanisms in place that significantly limit susceptibility to fraud and manipulation.
The presentation emphasized that these factors make ETH spot markets highly indicative of a market resilient to fraud and manipulation.
SEC Approval for Spot Bitcoin ETFs
After years of denials, the SEC finally granted approval for 11 spot Bitcoin ETFs to start trading in January. These investment vehicles now trade on stock exchanges and have experienced significant inflows. Grayscale was one of the fund managers that received approval and converted its popular Bitcoin Trust into a spot Bitcoin ETF.
Standard Chartered’s Prediction and ETH Price Surge
In a report last month, British multinational bank Standard Chartered predicted that ETH ETFs would receive approval from the SEC by May, anticipating a potential surge in the asset’s price. On Friday, ETH reached $4,000 per coin for the first time since 2021. Currently, it stands slightly below that at $3,948 according to CoinGecko data.
π₯ Hot Take: Coinbase Presents Market Manipulation Safeguards for Grayscale’s Proposed ETH ETF π₯
Coinbase’s recent meeting with the SEC regarding Grayscale’s proposed spot Ethereum (ETH) exchange-traded fund (ETF) sheds light on the efforts being made to address market manipulation concerns. By highlighting the comprehensive surveillance-sharing agreement with the CME and emphasizing the resilience of ETH spot markets against fraud and manipulation, Coinbase aims to pave the way for an approved ETH ETF. The recent approval of spot Bitcoin ETFs by the SEC has opened doors for other reputable financial institutions like Grayscale to seek approval for similar products. With Standard Chartered predicting SEC approval for ETH ETFs by May and the recent surge in ETH price, there is growing anticipation in the crypto community about the potential impact of an approved ETH ETF.
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