ConsenSys Urges SEC to Approve Spot Ethereum ETFs

The company behind the cryptocurrency wallet MetaMask, ConsenSys, has sent a letter to the U.S. Securities and Exchange Commission (SEC) urging the approval of spot Ethereum ETFs.

In our comment letter to the SEC on ETH ETF approval, “We urge the Commission to recognize the advanced safeguards inherent in Ethereum’s design”. ? https://t.co/agfLYbl1Vt

— Consensys (@Consensys) March 29, 2024

On March 8, the SEC requested public comments on the application for the iShares Ethereum Trust. The regulator expressed concerns about the Proof-of-Stake (PoS) consensus algorithm, which Ethereum adopted in September 2022.

ConsenSys noted that the security of PoS in the second-largest cryptocurrency by market capitalization surpasses that of Bitcoin’s Proof-of-Work. In January 2024, the SEC approved instruments based on digital gold.

The company also highlighted Ethereum’s distributed verification process, built-in mechanisms to combat fraud and manipulation, high attack costs, and environmental benefits.

“We strongly urge the SEC to recognize the advanced protection of Ethereum, which not only matches but exceeds the security and resilience of Bitcoin ETPs previously approved by the SEC,” the letter states.

In early March, Grayscale and Coinbase discussed with the SEC the conversion of ETHE into a spot Ethereum ETF. The race to launch the instrument also includes Franklin Templeton, VanEck, BlackRock, Fidelity, and Invesco with Galaxy.

Galaxy Digital deemed the approval of an ETH ETF in May as “extremely unlikely,” citing the lack of active engagement by the Commission with issuers and media reports of SEC subpoenas regarding Ethereum’s classification.

Earlier, Bloomberg analyst Eric Balchunas halved the probability of a spot Ethereum ETF being registered in May—from 70% to 35%. According to GSR, the chances have dropped to 20%.

Previously, U.S. senators urged the SEC not to approve new cryptocurrency exchange-traded funds, citing the “enormous risks” of these instruments.