Spot Ethereum ETF Receives New Support In ConsenSys Letter Seeking SEC Approval

Key Points:

• ConsenSys advocates for spot Ethereum ETF approval, citing superior security.
• SEC intensifies investigation into Ethereum’s regulatory status.
• Ethereum Foundation under scrutiny post-governance model transition.

ConsenSys, the parent company of MetaMask, has submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) in support of a spot Ethereum ETF.

ConsenSys Pushes for Spot Ethereum ETF Approval Amid SEC Scrutiny

The letter counters the SEC’s concerns regarding potential fraud, manipulation, and Ethereum’s proof-of-stake consensus design. It emphasizes Ethereum’s superior security features compared to previously approved spot Bitcoin ETFs.

ConsenSys highlights Ethereum’s fast block finalization, distributed verification process, high attack costs, reduced penalties, and environmental benefits as key advantages.

“We urge the SEC to recognize the advanced safeguards inherent in Ethereum’s design, which not only meet but exceed the exemplary security and resilience safeguards underlying Bitcoin-based ETPs that have previously been approved by the SEC,” ConsenSys stated in the letter.

Ethereum Foundation Targeted in SEC Probe

Recently, the SEC has intensified its legal efforts to classify Ethereum, the second-most popular cryptocurrency, as a security. This move follows subpoenas received by U.S. companies related to an investigation. The news deals a further blow to the crypto industry’s hopes for the SEC’s approval of spot Ethereum ETF applications, especially after the agency’s green light on several Bitcoin ETFs in January.

The SEC’s investigation into Ethereum, particularly targeting the Swiss-based Ethereum Foundation, commenced after the blockchain’s transition to a new governance model called “proof-of-stake” in September 2022. The probe entails demanding companies disclose any documents and financial records related to their interactions with the Ethereum Foundation.