Consensys Defends Ethereum's System, Addresses SEC Concerns Over Spot Ether ETFs
Summary:
Blockchain software company Consensys has responded to the US SEC's concerns over potential risks of fraud and manipulation in Ethereum's proof-of-stake system, particularly related to spot Ether ETFs. In an official letter, Consensys asserted these concerns were baseless, claiming Ethereum's system surpasses the security of Bitcoin-backed ETFs. The company also emphasized Ethereum’s various advantages over Bitcoin, and urged the SEC to acknowledge its superior security features. The decision whether to approve a spot Ether ETF in May 2023 remains uncertain. Meanwhile, bets on the SEC approval have reached at least $12 million in the predictions market.
Blockchain technology company Consensys has responded to the concerns raised by the United States Securities and Exchange Commission (SEC) regarding potential threats of fraud and manipulation associated with Ethereum's proof-of-stake system, specifically with respect to spot Ether exchange-traded funds (ETFs). The company, which is known for its popular MetaMask wallet, stated in its official reply to the SEC, that the worries about fraud and manipulation are unfounded.
In a blog post, Consensys elucidated, "As a matter of fact, Ethereum's PoS protocol surpasses Bitcoin's proof-of-work (PoW) security, which forms the backbone for Bitcoin-linked ETFs already green-lit by the SEC for public trading.”
The firm further pointed out Ethereum's edge over Bitcoin—faster block finality, a split in responsibilities between validators and attestors to prevent any single entity from dominating the network, increased costs for launching an attack, strict penalties for breaching validator rules, and a smaller carbon footprint.
Introducing the idea that Ethereum benefits from a more extensive network of developers than Bitcoin and has a blockchain that is fully public and fully transparent, Consensys encouraged the SEC to recognize Ethereum's unmatched security measures, which exceed those of Bitcoin-based ETPs that have already received SEC authorization.
Whether the SEC will approve a spot Ether ETF this May still hangs in the balance, compared to the popularity of spot Bitcoin ETFs. VanEck's investment product will be the first to cross the path of the SEC for approval or rejection on May 23, which is the final deadline the SEC has given for the next bunch of spot ETH ETF applications.
Though there was optimism about approval in 2023 among many experts, some speculate that the applications could be rejected by the commission in 2024. Many firms, counting Fidelity, Hashdex, and ARK 21Shares, have spot ETH ETF applications in line for approval or rejection. ETFs associated with Ether futures started receiving SEC authorization from October 2023.
Betting has become a popular activity among crypto enthusiasts, with bets on whether the United States SEC will approve spot Ether ETFs by the end of May reaching at least $12 million. The SEC gave its green light for 11 spot Bitcoin ETFs to be traded and listed on January 10.
Investment company Grayscale remains confident that the SEC's decision on spot Ether ETFs will favor them by May. The company's chief legal officer, Craig Salm, stated on March 25, that the SEC's apparent "disengagement" with applicants is not an indication of the approval or rejection of an ETF.
Published At
3/31/2024 1:51:04 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.