Paul Grewal, chief legal officer at Coinbase, has come forward to criticize a letter written by two US senators urging the Securities and Exchange Commission (SEC) to impose stricter regulations on Bitcoin ETFs and refrain from approving any further applications for cryptocurrency ETFs. encrypted. .
In a March 15 thread, he challenged the assertions of Senators Jack Reed and Lavonza Butler and argued that the ETF market should be expanded to include assets beyond Bitcoin.
Grewal advocates for Ethereum ETFs
“With all due respect, Senators, the evidence points in exactly the opposite direction,” he said.
Grewal highlighted the strength of many digital asset commodities beyond Bitcoin, citing Ethereum (ETH) as an example, noting that the market's liquidity and metrics rival even those of major S&P 500 stocks.
He stressed that Ethereum shows exactly the same level of strong and consistent correlation, which is suitable for enabling market monitoring in comparison to Bitcoin, both in its futures and spot markets.
The Coinbase CEO also pointed to a comment letter recently filed with the SEC, which provides the legal, technical, and economic rationale for approving a product traded on the Ethereum Exchange (ETP).
Senator's message
In their letter dated March 11, Democratic Senators Jack Reed and LaFonza Butler argued against further approvals of cryptocurrency ETFs by the SEC, warning of the risks that thinly traded markets that are vulnerable to fraud and manipulation pose to investors.
“Retail investors will face enormous risks from exchange-traded products that reference poorly traded cryptocurrencies or cryptocurrencies whose prices are particularly vulnerable to pump-and-dump or other fraudulent schemes,” the letter said.
The senators stressed the need for caution, urging the SEC to refrain from letting recent approvals of spot Bitcoin ETFs set a precedent for the future, citing Bitcoin's well-established and relatively audited market compared to other cryptocurrencies.
Reed and Butler also called for enhanced regulatory scrutiny of spot Bitcoin ETF products, and urged specific steps to protect investor interests, including increased oversight of brokers and advisors.
They expressed doubts about the suitability of other cryptocurrencies to support the associated exchange-traded products, citing insufficient trading volumes and market integrity. They also questioned the possibility that other cryptocurrency futures markets would demonstrate the necessary correlation with spot markets to facilitate effective market surveillance to identify and prevent bad actors.
Currently, the SEC is reviewing eight proposed applications for Ethereum ETFs, with expectations that other altcoins may follow suit in the future.
