Representatives from the United States Securities and Exchange Commission (SEC) recently engaged in discussions with Coinbase and Grayscale regarding the pending spot Ethereum exchange-traded funds (ETFs).

While Coinbase delivered a presentation regarding Ethereum ETFs to the financial regulator, Grayscale focused on the potential listing of the Grayscale Ethereum Trust on NYSE Arca.

Coinbase, Grayscale Discuss Ethereum ETFs

According to Coinbase, potential Ethereum ETF shares would fall under commodity-based shares, similar to Bitcoin ETFs. The firm emphasized that the Commission’s reasoning behind approving spot Bitcoin ETPs holds, if not stronger, for Ethereum.

Additionally, Coinbase highlighted data demonstrating the robustness of Ethereum futures and spot markets, comparable to Bitcoin’s.

“As with Bitcoin, the Exchange’s comprehensive surveillance-sharing agreement with the CME will assist in surveilling for fraud and manipulation,” Coinbase affirmed.

Read more: How To Buy Ethereum (ETH) With a Credit Card: A Step-by-Step Guide

Less than two weeks ago, Coinbase endorsed Grayscale’s move to transform its Ethereum Trust into an ETF while asserting Ethereum’s classification as a commodity. The exchange’s legal officer said the firm provided the SEC with the necessary legal, technical, and economic justifications for approving an Ethereum-based ETF.

“The economics show that Ethereum is as resilient as Bitcoin in satisfying the Commission’s standard for ETP (exchange-traded product) approvals,” Coinbase’s Chief Legal Officer, Paul Grewal said.

Meanwhile, the initiative has drawn differing opinions from the crypto community, who are speculating about the potential implications of these talks. ETF Expert Nate Geraci highlighted Coinbase’s analysis, which showed a correlation between Ethereum futures and spot markets. Still, Geraci expressed uncertainty about “what grounds for disapproval of spot ether ETFs would be.”

On the other hand, Eric Balchunas, a senior ETF analyst at Bloomberg, voiced apprehension regarding the SEC’s silence on the pending applications, hinting at potential setbacks for the applicants.

“There’s no court loss hovering over. And the correlations between [Ethereum] futures and spot isn’t as strong [as that of Bitcoin], Balchunas added.

Read more: Ethereum (ETH) Price Prediction 2024 / 2025 / 2030

Nevertheless, Balchunas acknowledged a glimmer of hope with BlackRock’s involvement. As the world’s largest asset management firm, BlackRock was pivotal in approving several spot Bitcoin ETFs. It signals a positive precedent for the pending applications.

Interestingly, crypto lawyer Scott Johnson said the meeting indicated “that the SEC is likely going to approve/deny based on correlation.”

“Why bring in Coinbase to discuss their correlation analysis before the actual issuers? Think it highlights as well, that IF the SEC were contemplating denial… they want to be sure they can counter comments that contradict their correlation analysis,” the lawyer concluded.