Trust Wallet (twt) 
Coinbase chief legal officer Paul Grewal has criticized a letter by two United States senators urging the SEC to tighten regulations on Bitcoin ETFs and reject further crypto ETF applications.
In a March 15 post to X, Grewal countered the senator’s recent March 11 letter, claiming that approving additional crypto ETFs beyond Bitcoin would expose investors to significant risks.
“Respectfully Senators, the evidence points exactly the opposite way,” said Grewal in response.
Grewal highlighted that the market for many cryptocurrencies smaller than Bitcoin, notably Ether (ETH), 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.
He also noted direct evidence that Ether’s futures and spot markets were just as correlated as Bitcoin’s, enabling market surveillance.
On March 9, Coinbase and Grayscale met with SEC officials to discuss a rule change for launching spot Ether ETFs, arguing that if Bitcoin ETFs were approved, Ether ETFs should be as well.
Analysts have suggested that Grayscale may be using its futures ETF application as a “trojan horse” to push the SEC to approve its spot Ether ETF.
Industry pundits, including VB Capital general partner Scott Johnson and Bloomberg ETF analyst Eric Balchunas, have predicted the SEC is likely to reject pending ETH ETFs due to “correlation” issues.
Nate Geraci, president of the ETF Store, stated that Coinbase is now fully supporting spot Ether ETFs, hinting at a potential escalation in the conflict between the exchange and the regulator.
Geraci claimed the SEC’s resistance to Ether ETFs was more about politics than protecting investors.
He noted that the SEC was gearing up to reject pending Ether ETF applications based on correlation but had approved Ether futures ETFs.
In a letter to SEC Chair Gary Gensler, democratic senators Jack Reed and Laphonza Butler argued that further crypto ETF approvals would expose investors to risks in thinly traded markets susceptible to fraud and manipulation.
There are currently eight proposed spot Ether ETF applications awaiting SEC approval, with hopes that other altcoins could follow suit.
