- Coinbase urges the SEC to approve Grayscale’s Ethereum ETF application.
- The platform provides Grayscale’s legal, technical, and economic rationale to win approval.
- Paul Grewal asserts that Coinbase’s support for the ETF is mainly driven by Ethereum’s status as a commodity.
In a novel development in the exchange-traded funds (ETFs) market, Coinbase has urged the Securities and Exchange Commission (SEC) to approve Grayscale’s Ethereum ETF. Coinbase’s Chief Legal Officer Paul Grewal, in a recent X post, shared insights on Grayscale’s legal, technical, and economic rationale to win the approval.
In October 2023, Grayscale applied to convert its $5 billion Ethereum Trust into spot Ethereum ETFs. The report was first unveiled by NYSE Arca, an exchange that is expected to list the ETF. While the asset manager awaits the SEC’s regulatory approval, CEO Michael Sonnenshein asserted that the firm intends to bring the development into the US regulatory perimeter.
Coinbase and Grewal’s support for the Grayscale Ethereum Trust was mainly driven by the recognition of ETH as a commodity and not a security. In a letter addressed to the SEC, Coinbase wrote,
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
According to the letter written on February 21, Coinbase firmly believes in the technological and operational security mechanisms embraced by Ethereum. Thus, the platform pushes the regulators to approve the Ethereum ETF, asserting that the product proves little vulnerability to fraud and manipulation.
While the recently launched spot Bitcoin ETFs grow remarkably, with BlackRock’s IBIT leading the march, the crypto community is anticipating the SEC’s approval of Ethereum ETFs. In addition, Coinbase pointed out that the regulator’s “decision in approving spot Bitcoin ETPs applies with equal – and in some ways greater – force for listing and trading the Shares.”
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