Coinbase has officially responded to the Securities and Exchange Commission’s (SEC) request for feedback on the proposal to list the ETH Grayscale Fund as a spot exchange-traded fund (ETF). The leading U.S. cryptocurrency exchange asserts that Ethereum (ETH) is a commodity, not a security, a standpoint recognized by various U.S. regulatory bodies and courts.
Supporting Ethereum’s ETF Listing
Coinbase’s submission supports the conversion of the Ethereum Grayscale Fund into a spot ETF. The exchange argues that the reasons for approving this listing align closely with those used to approve Bitcoin spot ETF products. Coinbase emphasizes that the proposal correctly categorizes the fund as based on a commodity, given the nature of its underlying asset, ETH.
Public Recognition of ETH’s Commodity Status
The exchange cites multiple instances where ETH’s status as a commodity has been acknowledged, including by the Commodity Futures Trading Commission (CFTC) in regulating ether futures, statements from commission officials, and federal court decisions. Notably, the SEC has not classified ETH as a security, which has enabled the CFTC to authorize the listing of ETH futures on platforms like the Chicago Mercantile Exchange (CME).
Ethereum’s Market Resilience
Coinbase highlights the robustness of the Ethereum blockchain and its mechanisms that mitigate fraud and manipulation risks. The exchange also points out the strength of ETH’s spot market, noting that its trading volumes far exceed those of many S&P 500 stocks, underlining ETH’s resilience as an asset.
Commitment to Innovation and Transparency
Paul Grewal, Coinbase’s Chief Legal Officer, reiterates the exchange’s dedication to nurturing innovation and building a transparent, secure, and inclusive financial ecosystem. This commitment includes engaging in continuous dialogue and conducting research to inform regulatory decisions, emphasizing their proactive approach to supporting the crypto industry’s growth.
