Bitcoin coin with ETH. and ETF text Put on dark background, Concept Entering the Digital Money Fund.

Key Takeaways:

Consensys argues Ethereum’s proof-of-stake (PoS) is superior to Bitcoin’s proof-of-work (PoW) in security and sustainability, addressing SEC’s concerns regarding fraud and manipulation risks in Ether ETFs.
Ethereum boasts advantages like faster block finality, higher attack costs, and a larger developer community, presenting a stronger case for SEC approval of spot Ether ETFs compared to Bitcoin-based ETPs.
Despite optimism and a growing market anticipation with $12 million bet on their approval, the SEC’s decision on spot Ether ETFs, including applications from Fidelity, Hashdex, and ARK 21Shares, remains uncertain with a deadline set for May 23.

Consensys recently responded to the United States Securities and Exchange Commission (SEC)’s concerns regarding the potential risks of fraud and manipulation associated with Ethereum’s proof-of-stake (PoS) system, specifically in relation to spot Ether exchange-traded funds (ETFs).

In their communication, the blockchain technology and Web3 software firm, known for developing the popular MetaMask wallet, addressed these concerns as unfounded.

In our comment letter to the SEC on ETH ETF approval, “We urge the Commission to recognize the advanced safeguards inherent in Ethereum’s design”. 📝 https://t.co/agfLYbl1Vt
— Consensys (@Consensys) March 29, 2024

They argued that Ethereum’s PoS system not only matches but exceeds the security features of Bitcoin’s proof-of-work (PoW) system, which forms the basis for Bitcoin-based ETFs previously greenlit by the SEC.

The company outlined several advantages of Ethereum over Bitcoin, including faster block finality, a division of roles among proposers and attesters to prevent any single stakeholder from gaining dominance, higher costs to launch attacks, penalties for validators who break rules, and greater environmental sustainability.

With a significantly larger developer community and a fully transparent, public blockchain, Ethereum presents a robust platform that Consensys believes surpasses the security measures of Bitcoin-based ETPs already approved by the SEC.

🚨 BREAKING 🚨

CONSENSYS IS PUSHING FOR ETHEREUM ETF APPROVAL.

CONSENSYS PARENT COMPANY OF METAMASK IS URGING THE SEC TO APPROVE ETHEREUM ETF, HIGHLIGHTING SECURITY BENEFITS OVER BITCOIN.
— Ash Crypto (@Ashcryptoreal) March 30, 2024

Despite the popularity of spot Bitcoin ETFs, the approval of a spot Ether ETF in the near term is still uncertain.

The SEC has set a deadline of May 23 to decide on the next batch of spot ETH ETF applications, starting with VanEck’s offering.

While there was optimism about approval in 2023, the outlook into 2024 suggests that the SEC might deny these applications.

Several firms, including Fidelity, Hashdex, and ARK 21Shares, are awaiting the SEC’s decision on their spot ETH ETF applications.

Consensys urges SEC to recognize Ethereum's better-than-Bitcoin qualities in considering ether ETF applications https://t.co/EoINUYCPQN
— The Block (@TheBlock__) March 30, 2024

The SEC had started to approve investment vehicles tied to Ether futures in October 2023.

Moreover, the cryptocurrency community is keenly observing the situation, with bets on the approval of spot Ether ETFs by the SEC reaching at least $12 million in the predictions market.

Grayscale, an investment management company, remains hopeful for a positive SEC decision on spot Ether ETFs by May.

.@Consensys introduced a letter to the SEC highlighting Ethereum's security superior to the Spot Bitcoin ETF.https://t.co/u9qOn41B4r pic.twitter.com/zpKzpdwYPg
— ICO Drops (@ICODrops) March 31, 2024

Grayscale’s chief legal officer, Craig Salm, pointed out that the SEC’s current non-engagement with applicants does not necessarily predict the outcome of ETF approvals, maintaining a watchful optimism for the future of Ether-based investment products.