- Coinbase met with the U.S. securities watchdog to discuss Grayscale’s proposed spot Ethereum ETF
- The discussion with the Securities and Exchange Commission covered topics like ETH market manipulation
- According to some, the discussion increased the odds of the approval of a spot Ethereum ETF
Details have emerged of a meeting between leading crypto exchange Coinbase and the United States securities watchdog SEC regarding crypto hedge fund Grayscale’s intention to offer a spot Ethereum exchange-traded fund (ETF). Coinbase addressed SEC’s fears like market manipulation with Coinbase noting that such vices are unlikely to affect the fund. The meeting increased the odds for the approval of a spot ETH ETF with some commentators noting that Coinbase’s presentation made it hard for the SEC not to approve “spot ether EFTs.”
CME to Help Monitor Fraud and Manipulation
According to a statement by the SEC, “the discussion concerned NYSE Arca’s proposed rule change to list and trade shares of the Grayscale Ethereum Trust.” Coinbase disclosed it’ll partner with the Chicago Mercantile Exchange (CME) to monitor “for fraud and manipulation.”
The exchange also noted that the ETH and BTC markets have the same characteristics adding that they’re “resilient to fraud and manipulation,” with the exchange adding that “Ethereum has mechanisms that” thwart such vices.
Grayscale is among firms whose spot Bitcoin ETF was approved by the SEC in January. The firm now wants to offer an ETH ETF and is waiting, together with others like asset management heavyweight Franklin Templeton, BlackRock, Ark Invest and VanEck for the regulator’s approval.
Not Before 2025?
Although the SEC pushed the decision on Fidelity’s ETH ETF application to this month in January, Grayscale’s Dave LaValle expects the regulator to declare its decision on Ethereum ETFs by May.
Discussions around a spot ETH ETF have divided analysts with some expecting such an ETF to be approved after 2025. Others wondered what the SEC would use as “grounds for disapproval of spot ether ETFs.”
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
With a spot Bitcoin ETF already approved, it’s likely that a spot Ethereum ETF would arrive faster.
