Coinbase Fires back at Senators Asking SEC to Halt Crypto ETF Approvals

Coinbase chief legal officer Paul Grewal has slammed a letter by two United States senators urging the SEC to more tightly regulate Bitcoin ETFs and reject any further crypto ETF applications.

In a March 15 post to X, Grewal criticized the senator's recent March 11 letter — which had claimed the approval of further crypto ETFs beyond Bitcoin would expose investors to "enormous risks."

Grewal explained that the market for many cryptocurrencies smaller than Bitcoin, notably Ether, demonstrated quality metrics that "exceed even the largest traded equities."

"ETH's spot market is deep and liquid– only two S&P 500 stocks have higher notional dollar trading volume," added Grewal.

Grewal added there was direct evidence that Ether’s futures and spot markets were just as correlated as Bitcoin's.

On March 9, Coinbase and crypto asset manager Grayscale met with SEC officials to discuss a rule change for the launch of spot Ether ETFs, where Coinbase argued that if the SEC approved Bitcoin ETFs, they should approve Ether ETFs as well.

In the March 11 letter addressed to SEC Chair Gary Gensler, the two democratic senators, Jack Reed and Laphonza Butler, claimed that any further crypto ETF approvals would see investors exposed to risks stemming from “thinly traded” markets rife with fraud and manipulation.

Alongside a series of requests for more stringent regulatory oversight into Bitcoin ETFs, Reed and Butler added that markets for cryptocurrencies smaller than Bitcoin were "far more exposed to misconduct."

There are currently eight proposed spot Ether ETF applications awaiting approval by the SEC, and there have been hopes that other altcoins could eventually tread a similar path.

(Source: CoinTelegraph)