Coinbase Challenges Senators, Urges SEC to Continue Approving Crypto ETFs

Crypto News- Coinbase’s chief legal officer, Paul Grewal, didn’t hold back in his response to two US senators’ recent plea to the SEC regarding tighter regulation on Bitcoin ETFs. In a post on March 15, Grewal didn’t mince words, calling out the senators’ concerns as misguided.

“Respectfully Senators, the evidence points exactly the opposite way,” Grewal countered, highlighting the robust metrics of cryptocurrencies beyond Bitcoin, notably Ether (ETH). He emphasized ETH’s substantial trading volume and liquidity, comparing it favorably to even some of the largest equities.

Coinbase Challenges Senators, Urges SEC to Continue Approving Crypto ETFs

Moreover, Grewal pointed out the striking correlation between Ether’s futures and spot markets, asserting that it mirrors Bitcoin’s, thus enabling effective market surveillance.

The recent meeting between Coinbase, Grayscale, and SEC officials on March 9 aimed to discuss the possibility of launching spot Ether ETFs. Coinbase argued that if the SEC greenlights Bitcoin ETFs, Ether ETFs should receive similar treatment.

However, speculation swirls around Grayscale’s intentions, with some suggesting their futures ETF application might serve as a strategic maneuver to pave the way for a spot Ether ETF approval.

Industry experts like Scott Johnson and Eric Balchunas predict the SEC may lean towards rejecting pending ETH ETFs, citing concerns over correlation between spot and futures prices.

Nate Geraci of the ETF Store sees Coinbase’s strong support for spot Ether ETFs as a sign of impending conflict with regulators, especially with the looming May 23 deadline for an ETH ETF decision. Geraci believes the SEC’s stance is less about investor protection and more about politics, hinting at a preference for spot BTC ETFs.

In their March 11 letter to SEC Chair Gary Gensler, Senators Jack Reed and Laphonza Butler raised alarms about the risks associated with further crypto ETF approvals, particularly for thinly traded markets susceptible to fraud and manipulation.

With eight proposed spot Ether ETFs awaiting SEC approval, there’s optimism that other altcoins could follow suit, despite the regulatory hurdles ahead.