The Securities and Exchange Commission (SEC) of the United States recently expressed concerns about the approval of an exchange traded fund (ETF) related to Ethereum (ETH). The financial regulator is concerned about possible market manipulation and the lack of regulation of some crypto exchanges. Blockchain company Consensys debunks these concerns in a recent blog.
Consensys dismisses SEC concerns about Ethereum
However, Consensys has dismissed these concerns as unfounded. The company has responded to the SEC’s investigation. The study examines the potential dangers of fraud and manipulation associated with Ethereum’s proof-of-stake system.
According to Consensys, the SEC’s concerns are unfounded and measures have already been taken to mitigate potential risks. The company emphasizes that the Ethereum market has evolved significantly since the early days of the cryptocurrency. The number of institutional investors has grown significantly and there is now a robust infrastructure for market regulation.
The blockchain and Web3 software development company responsible for the MetaMask wallet said:
“In fact, Ethereum’s PoS implementation meets and exceeds the security of Bitcoin’s Proof-of-Work (PoW), which underlies Bitcoin-based ETFs already approved for trading by the SEC.”
An Ethereum ETF is expected to promote broader adoption of Ethereum as a legitimate investment vehicle. This would provide institutional investors with an easy way to participate in the value of Ethereum without having to actually manage the assets themselves.
SEC approval of Ethereum ETF uncertain
However, Consensys recognizes that there are challenges, particularly when it comes to regulation and market integrity. The company advocates for collaboration between industry and regulators to address these challenges and promote a healthy and mature digital asset market.
Additionally, the blockchain company has highlighted that Ethereum has a larger development team than Bitcoin (BTC). ETH is also working on a fully transparent and public blockchain. Consensys is calling on the SEC to recognize Ethereum’s better security features, which surpass those of Bitcoin-based ETFs but were previously approved by the SEC.
While Bitcoin spot ETFs have proven very popular, it is still unclear whether an Ethereum ETF will be approved. The deadline for the American regulator is May this year.