“ETH a Commodity, not a Security,” Coinbase in Response to the SEC

The discussion over spot ETFs has spiked significantly in the past few quarters; the much-awaited Bitcoin spot ETF secured approval from the Securities and Exchange Commission (SEC) of the United States. 

Coinbase, the second most used centralized cryptocurrency exchange in the market, responded to the SEC over the proposed amendments in the rules to list Ethereum Grayscale Fund as a spot exchange-traded fund, backing the conversation of the institution over the conversion. 

In the response letter, Coinbase argued why the listing should be approved for “almost identical reasons” stated by Grayscale regarding approving the highly anticipated Bitcoin Spot ETF.

Coinbase asserted in the response letter that “ ETH is a commodity, not a security.” As per the arguments of the cryptocurrency exchange, Ethereum’s commodity status has been publicly recognized in several opportunities in the Commodity Futures Trading Commission (CFTC) regulations of Ether futures, statements of the commission, and rulings of federal courts. 

The war of statements between the SEC and Coinbase is quite old, and the firm was earlier sued by the US SEC. The battle between the cryptocurrency exchanges is a never-ending struggle; most of the time, the commission files a case on any exchange for operating money service with any regulatory approval. 

GrayScale is one of the most significant names in the crypto market, and as of February 22, 2024, the institution holds 446,476 Bitcoin. 

Market Growth Post- Bitcoin Spot ETF Approval

Before the approval, Bitcoin spot ETF (Exchange Traded Fund) faced back-to-back rejections from the Securities and Exchange Commission of the United States. 

The commission gave a green signal to the applications of BTC spot ETF in January 2024, which helped Bitcoin to expand its adoption. As per several reports, the Bitcoin ETF has attracted thousands of crypto enthusiasts. 

More than $150 Million of fresh funds has started to flow into the Bitcoin ecosystem, and the sudden success of the ETF has made analysts think that Ether spot ETF will also perform similarly. 

Spot ETFs Explained

ETFs (Exchange Traded Funds) are a type of security that tracks the underlying performance of a collection of assets or commodities. 

In simpler words, ETFs are the smaller portion of the assets or commodities that can easily be traded with less capital, and the price of an ETF increases as the price of the asset increases. 

Approximately 11 financial giants and crypto-based companies have secured the approval of Bitcoin spot ETF. The race to file Ether spot ETF has stirred the market, resulting in significant growth in Ethereum trading price. 

Crypto Market Price Update

The cryptocurrency market has shown significant improvements since the beginning of 2024; Bitcoin, the leader, crossed the much-awaited resistance of $50k and the highest traded at $52,945. 

A primary pump in the market capitalization of the crypto industry is seen; it is crucial to note that it reached $2.01 Trillion on February 21, 2024. Similarly, Ethereum, the second most discussed token in the market, traded at $3,031 in the past 52 weeks. 

Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.