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Consensys, the software company behind the MetaMask digital wallet, is calling on US regulators to recognize the advanced safeguards inherent in the design of ethereum (eth).
The Fort Worth, Texas-based firm wrote a eth-etf-approval-pos” target=”_blank” rel=”noreferrer noopener”>letter in response to the US Securities and Exchange Commission's (SEC) recent request for public comments on pending Nasdaq actions application for a rule change to allow trading of the iShares ethereum Trust.
In the letter, Consensys explained why regulatory concerns about ethereum's susceptibility to fraud and manipulation are unfounded.
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The company also argues that several key aspects of ethereum's proof-of-stake (PoS) implementation make it more resistant to manipulation than bitcoin's (btc) proof-of-work (PoW) consensus model, which underlies transactions. on the stock market based on bitcoin. products previously approved by the SEC.
The regulator's request, issued on March 8, sought comments on several aspects of ethereum, including its proof-of-stake consensus mechanism and the concentration of control or influence by a few individuals or entities. He specifically asked if these features raise specific concerns about ethereum's susceptibility to fraud and manipulation.
One of the highlights of Consensys' comment letter is ethereum's faster block finality under PoS, ensuring provable transaction finality in a shorter time frame than PoW. Furthermore, ethereum's PoS is based on a distributed and randomized validation process that avoids control by large stakeholders, thus mitigating the risk of manipulation.
The blockchain technology company also emphasized ethereum's reducing penalties for validators who violate the protocol's rules and the network's Byzantine fault tolerance, making it significantly more expensive to attack ethereum than bitcoin.
Additionally, he highlighted the environmental benefits of ethereum, noting that the network's consensus mechanism is more environmentally friendly than bitcoin's.
In the letter, Consensys urged the SEC to approve ethereum spot ETFs. The company emphasized its commitment to onboarding the next billion users to web3, stating that its comment letter is a step to drive progress and provide relevant and useful information to the public.
The company expressed its willingness to maintain an ongoing and constructive dialogue with the SEC and its staff on this matter.
In addition to Consensys, other players in the crypto space have also expressed their opinion on an ethereum ETF. In early March, reports emerged that Coinbase had met with the SEC to discuss a Grayscale proposal for an eth exchange-traded fund.
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Coinbase reportedly made a regulatory filing pledging to implement a co-monitoring agreement with the Chicago Mercantile Exchange (CME) to check for any fraud or manipulation of the ethereum ETF market, if approved.
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