Coinbase’s chief legal officer, Paul Grewal, confirmed that the cryptocurrency exchange has now officially commented to the SEC in requesting additional remarks on the listing of the Grayscale Ethereum Trust for trading. In a letter, Coinbase gave legal, economic, and technical support for the SEC approval of the ETF.
Grewal stated that Ethereum is not a security before or after its recent Merge upgrade. He argued that the SEC, CFTC, and market participants have treated Ether as a commodity rather than a security. Analysts predict the SEC may approve spot Ether ETFs as early as May 2023.
Last October, Grayscale and NYSE Arca filed for converting the Grayscale Ethereum Trust into a spot Ether ETF. Coinbase claimed that the same logic supporting SEC approval for Bitcoin ETFs applies even more strongly to an Ether ETF. It cited Ethereum’s deep liquidity, tight spreads, and consistent pricing as evidence it is resilient against manipulation.
Launching spot Ether ETFs in the U.S. could significantly benefit Coinbase’s custodial services arm. Coinbase currently acts as a custodian for eight Bitcoin ETFs and is named as an institution for yield-generating Ether ETFs abroad. Investing in spot Ether ETFs would enable public market exposure to Ethereum without direct asset ownership.
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