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The SEC has no compelling reason to reject applications to launch an ethereum ETF, says Coinbase Chief Legal Officer Paul Grewal.
In his X post, Grewal revealed vital facts about ethereum, highlighting its widespread adoption among millions of Americans since its creation in 2015 and its integral role in the cryptocurrency ecosystem.
According to Coinbase's lawyer, the SEC has treated ethereum (eth) as a commodity, not a security, for many years. The CFTC and federal courts have unanimously confirmed that the asset has this status.
The Coinbase lawyer referred to statements made by the agency's director of corporate finance, William Hinman, in 2018. He also recalled SEC Chairman Gary Gensler's speech before Congress before being named head of the commission . In his comments, Gensler took a similar position.
Grewal emphasized that ethereum must meet the criteria of the Howey test, which defines values. He noted consistency in oversight of the asset, including its listing on CFTC-regulated futures exchanges starting in 2021.
In light of the regulations in place, Grewal urged the SEC not to create unnecessary barriers to the approval of ethereum spot ETFs. He stressed that doubts over eth's regulatory status contradict long-standing precedent and could undermine investor confidence.
“Digital assets such as eth that do not involve an ongoing contractual obligation related to a commercial enterprise are not “investment contracts” or “securities.”
Paul Grewal, Chief Legal Officer at Coinbase
Grewal's comment came in response to the regulator's March 20 decision to postpone the verdict on VanEck's ethereum ETF application. The department extended the review period until May 23 and requested public comment. Previously, the Commission reached similar conclusions based on similar proposals.
Franklin Templeton, BlackRock, Fidelity and Invesco with Galaxy are also in the race to launch an eth-based ETF.