Coinbase Makes Case for Ethereum ETF Approval, Citing Ethereum’s Commodity Status and Robust Governance

Coinbase Makes Case for Ethereum ETF Approval, Citing Ethereum’s Commodity Status and Robust Governance

Crypto News – Coinbase, a prominent cryptocurrency exchange based in the United States, has thrown its support behind Grayscale’s efforts to transform Ethereum Trust into a spot Ethereum exchange-traded fund (ETF).

Simultaneously, there is considerable optimism within the Ethereum community regarding the forthcoming decision by the US Securities and Exchange Commission (SEC) regarding a spot Ethereum ETF.

In a move to advocate for the approval of a spot Ethereum ETF by the SEC, Coinbase’s chief legal officer, Paul Grewal, released a comprehensive 27-page letter on February 22. This document meticulously outlines the legal, technical, and economic justifications for the SEC to give the green light to an Ethereum-based ETF.

A pivotal argument presented by Coinbase is that Ethereum (ETH) should be classified as a commodity rather than a security. This viewpoint is supported by the approval of ETH futures by the Commodity Futures Trading Commission (CFTC). Additionally, statements from SEC officials and judicial rulings further reinforce this position. Significantly, the SEC has not challenged the CFTC’s designation of ETH as a commodity.

Moreover, Grewal underscored the robust governance provided by Ethereum’s proof-of-stake consensus mechanism. He argued that this system effectively mitigates risks associated with fraud and manipulation.

Consequently, Coinbase seeks to elucidate the dynamics of the Ethereum market and its comprehensive surveillance mechanisms. It contends that these factors warrant the SEC’s approval of the proposed ETF.

“The economic data demonstrates that Ethereum is as resilient as Bitcoin in meeting the Commission’s criteria for ETP (exchange-traded product) approvals,” stated Grewal.