Coinbase supports the approval of an ether ETF, highlighting legal and technical advantages. The decision could affect Coinbase’s custodial services and signify changing regulatory standards. As a prominent cryptocurrency platform, Coinbase is actively promoting the Grayscale Ethereum Trust to be listed as an ETF for spot ether trading. The company’s Chief Legal Officer, Paul Grewal, shared on social media platform X that Coinbase has addressed a request for a statement from the Securities and Exchange Commission (SEC) on this issue. In their response to the SEC, Coinbase presented strong legal, technical, and economic reasons in favor of approving spot ether ETFs. They claim that Ethereum (ETH) is classified as a commodity, not a security, in their argument. Stating that various regulatory bodies and legal precedents support the idea, Coinbase specifically pointed out that the Commodity Futures Trading Commission (CFTC) has recognized ETH as a commodity and federal court rulings have emphasized this classification. Additionally, Coinbase highlighted the security of Ethereum’s blockchain technology, noting that it inherently prevents fraud and manipulation. They highlighted Ethereum’s deep market, narrow spreads, and price correlation among spot markets as signs of its ability to withstand fraudulent activities. Coinbase highlighted Ethereum’s significant trading activity, which exceeded that of many stocks in the S&P 500. They also mentioned similarities between this and the SEC’s prior authorization of spot Bitcoin ETFs. They contend that the same logic should be used for spot ether ETFs. They emphasized the significance of having thorough agreements for sharing surveillance information.