Coinbase Met With SEC Over Grayscale's Proposed Ethereum ETF - Decrypt
03/10/2024 12:01
Federal filings reveal that the exchange gave a presentation to Wall Street's top regulator.
America's biggest cryptocurrency exchange met with the Securities and Exchange Commission last week over Grayscale's proposed spot Ethereum (ETH) exchange-traded fund.
Publicly-listed Coinbase gave a presentation to Wall Street's top regulator where it talked about Grayscale's proposed product, documents filed on Wednesday from the regulator show.
In October, Crypto fund manager Grayscale filed an application with the SEC to convert its Grayscale Ethereum Trust (ETHE) into a spot ETH ETF. The proposed ETF would give investors direct exposure to the second biggest cryptocurrency; it would trade on a stock exchange—allowing investors to buy shares that track ETH's price.
Coinbase's presentation showed that the crypto exchange had spoken about potential market manipulation and how the exchange would have a "comprehensive surveillance-sharing agreement with the Chicago Mercantile Exchange will assist in surveilling for fraud and manipulation."
"Spot markets for ETH are highly indicative of a market resilient to fraud and manipulation," the presentation said, adding that the cryptocurrency has "mechanisms that significantly limit ETH’s susceptibility to fraud and manipulation."
In January, the SEC gave the green light to 11 spot Bitcoin (BTC) ETFs to start trading. After a decade of denials, the investment vehicles now trade on stock exchanges, and have been a roaring success, with huge inflows.
Grayscale was one fund manager that received approval; it converted its popular Bitcoin Trust into a spot Bitcoin ETF.
Now, along with other reputable financial institutions, it is trying to get approval from the regulator to do the same with ETH, the second biggest digital coin by market cap.
Coinbase analysis shows correlation b/w ether futures & spot markets every bit as strong as w/ bitcoin markets…
Add-in that SEC approved CME-traded ether futures ETFs and I’m not sure what grounds for disapproval of spot ether ETFs would be.
— Nate Geraci (@NateGeraci) March 8, 2024
British multinational bank Standard Chartered last month said in a report that it expected ETH ETFs to get approval from the SEC by May—and that the asset price could soar as a result.
On Friday, ETH hit $4,000 per coin for the first time since 2021. The price of ETH stands slightly below that at $3,948, per CoinGecko data.
Edited by Ryan Ozawa.