Cryptocurrency exchange Coinbase supports Grayscale’s application to convert its current Ethereum Trust product to offer a spot Ethereum exchange-traded fund (ETF) and has received approval from the U.S. Securities and Exchange Commission (SEC). I asked for it.
As the only cryptocurrency exchange traded on a U.S. stock exchange, Coinbase is a prominent voice in the cryptocurrency ecosystem. On Wednesday, the company, the cryptocurrency custodian of the Grayscale Ethereum Trust, Detailed report He highlighted Ethereum’s market maturity and regulatory compliance, arguing that these two aspects make ETH a Bitcoin-like product.
“The market has long understood that ETH is not a security,” Coinbase wrote in the letter. “Senior officials at the commission have made similar statements publicly several times over the past six years, and neither the commission nor its staff has denied this position since the merger.”
The cryptocurrency industry has long sought regulatory clarity on the true legal nature of tokens and digital assets. Issuers of cryptocurrencies and tokens often resist the idea of digital assets being considered securities. This is because it significantly increases regulatory burdens, exposes us to potential litigation by investors if goals and expectations are not met, and significantly limits our ability to tap into wider global markets. is. .
“The characteristics of the Ether (ETH) market and the exchange’s oversight and sharing agreement with the Chicago Mercantile Exchange (CME)…The exchange’s proposed rule changes were approved for much the same reasons as stated by the Commission. “Spot Bitcoin Exchange Traded Products (ETPs),” the letter said.
Coinbase also praised Ethereum’s decentralized governance, noting its effectiveness in reducing the risk of fraud and manipulation. This topic was already considered by the SEC, where he argued that Ethereum is not actually a security given the current situation. That is because there is no single organization, company or group that can control the network, unilaterally determine its model and play a decisive role in meeting investor expectations.
This endorsement comes amid widespread discussion in the financial industry about the potential risks associated with concentration on the Ethereum network, particularly regarding Spot Ethereum ETFs that include staking options. Financial giants such as S&P Global and JP Morgan expressed such concernshighlighting the need for diverse staking strategies to prevent network centralization.
“The rise in Ether staking ETFs could impact the composition of validators participating in the Ethereum network’s consensus mechanism,” S&P Global analysts argue. “The impact of the U.S. Spot Ether ETF on concentration risk, whether positive or negative, can be significant, making continuous monitoring of concentration risk even more important. ”
The SEC’s approval of 11 Bitcoin Spot ETFs in January marked a significant regulatory milestone for the crypto industry, sending Bitcoin prices higher and hitting the $50,000 barrier in February for the first time since 2021. broke through. The rest of the crypto market followed this trend.According to him, the market capitalization of the cryptocurrency ecosystem will increase to more than $2 trillion CoinGecko.
Edited by Andrew Hayward
