Jai Sahu
KEY POINTS:
- Coinbase is pushing for the SEC to green-light Grayscale’s Ethereum ETF proposal.
- It outlines Grayscale’s legal, technical, and economic arguments for approval.
- Paul Grewal highlights Coinbase’s backing due to Ethereum being classified as a commodity.
Coinbase has taken a significant step in the ETF arena by advocating for the SEC’s approval of Grayscale’s Ethereum ETF. Paul Grewal, Coinbase’s Chief Legal Officer, elaborated on Grayscale’s legal, technical, and economic grounds for approval in a recent post on X.
Today @coinbase responded to @SECGov's request for comment on the proposed @Grayscale Ether Trust ($ETHE) ETP. 27 pages and 96 citations that provide the (1) legal, (2) technical, and (3) economic rationale for approval. 1/6
— paulgrewal.eth (@iampaulgrewal) February 21, 2024
In October 2023, Grayscale sought to transform its $5 billion Ethereum Trust into spot Ethereum ETFs, with NYSE Arca revealing the report and poised to list the ETF. As Grayscale awaits the SEC’s nod, CEO Michael Sonnenshein emphasized their goal to align the initiative with US regulatory standards.
The support from Coinbase and Grewal for Grayscale’s Ethereum Trust primarily stems from recognizing ETH as a commodity, not a security. Coinbase expressed this stance in a letter to the SEC, stating,
ETH’s status as a commodity and not a security has been recognized in a variety of circumstances, including the CFTC’s regulation of ETH futures, public statements by Commission officials, and rulings by federal courts
On February 21, Coinbase conveyed its strong belief in Ethereum’s technological and security measures in a letter. Therefore, it urges the SEC to approve the Ethereum ETF, arguing that it is highly resistant to fraud and manipulation.
Amid the rising popularity of spot Bitcoin ETFs, led by BlackRock’s IBIT, the cryptocurrency community eagerly awaits the SEC’s decision on Ethereum ETFs. Coinbase also mentioned that the rationale behind approving spot Bitcoin ETPs should equally, if not more convincingly, apply to the approval and trading of these Shares.