In a proactive move, the Coinbase team has urged the U.S. Securities and Exchange Commission (SEC) to greenlight Grayscale’s application for a spot Ethereum (ETH) ETF. Paul Grewal, Coinbase‘s Chief Lawyer, emphasized the necessity of approving Grayscale’s application, particularly concerning the preliminary conversion of the ETH trust into a tradable instrument.
As part of the regulatory process, Coinbase engaged in a call with the SEC, presenting a comprehensive case for the approval of Grayscale’s Ethereum spot ETF. Grewal highlighted that the crypto exchange provided the Commission with a robust “legal, technical, and economic justification” in support of Grayscale’s initiative.
Expressing the commitment to fostering innovation and establishing a transparent, secure, and inclusive financial ecosystem, Grewal stated that Coinbase maintains an ongoing dialogue and conducts research to explore regulatory solutions within the cryptocurrency space.
The SEC, on January 25, deferred its decision on Grayscale’s Ethereum ETF application until March 10. Gary Gensler, Chairman of the Commission, cited limitations in approving spot ETFs based on only one cryptocurrency, referencing the approval of a Bitcoin (BTC) spot ETF. This delay also impacted BlackRock’s analogous bid for a spot crypto ETF.
Craig Salm, Grayscale’s Head of Legal, remains optimistic about the SEC greenlighting an ETF based on the Ethereum spot price, predicting potential approval in the summer of 2024. The push for approval from Coinbase underscores the industry’s eagerness to expand investment avenues and marks a strategic step towards broader adoption of cryptocurrency-based financial products.
