Coinbase Chief Legal Officer Paul Grewal urges the Securities and Exchange Commission (SEC) to impose stricter regulations on Bitcoin exchange-traded funds and refrain from approving future crypto ETF applications. He came forward to criticize a letter written by two U.S. senators asking for .
In the March 15th X thread, he disputed the claims of Sens. Jack Reed and LaFonza Butler and defended the need to expand the ETF market to include assets beyond Bitcoin.
Grewal backs Ethereum ETF
“With all due respect, senators, the evidence points in the exact opposite direction,” he said.
Grewal highlighted the robustness of various digital asset commodities beyond Bitcoin, citing Ethereum (ETH) as an example, saying its market liquidity and metrics rival even the leading S&P 500 stocks.
He emphasized that Ethereum shows exactly the same level of strong and consistent correlations, making it well-suited to enable market monitoring in both future and spot markets when compared to Bitcoin.
Coinbase executives also referenced a recent comment letter filed with the SEC providing the legal, technical, and economic basis for approval of Ethereum Exchange Traded Products (ETPs).
senator's letter
In a March 11 letter, Democratic Sens. Jack Reed and LaFonza Butler objected to further SEC approval of crypto ETFs, arguing that less-traded markets susceptible to fraud and manipulation would be unable to invest. Warned them of the risks they posed to their homes.
“Retail investors face significant risks from ETPs that reference cryptocurrencies that are sparsely traded or whose prices are particularly susceptible to pump-and-dump and other fraudulent schemes. '', the letter says.
The senators emphasized the need for caution and called on the SEC to refrain from approving Bitcoin, such as the recent approval of the Spot Bitcoin ETF, which would set a precedent for the future. He noted that it is relatively well-established and scrutinized.
Mr. Reid and Mr. Butler also called for increased regulatory oversight of spot Bitcoin ETF products and called for concrete steps to be taken to protect investor interests, including increased oversight of brokers and advisors.
They expressed doubts about the suitability of other cryptocurrencies to support related ETPs, citing insufficient trading volumes and market health. They also questioned the ability of futures markets for other cryptocurrencies to exhibit 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 Spot Ethereum ETFs, and it is expected that other altcoins may follow suit in the future.
