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Consensys Refutes SEC's Concerns Over Ethereum ETF, Highlights Superior Security

Consensys counters SEC's Ethereum ETF concerns, showcases blockchain's robust security features.

In a detailed response to the SEC, Consensys argued that Ethereum's proof-of-stake system offers a security level surpassing that of Bitcoin, addressing concerns over potential fraud and manipulation in spot Ether ETFs. The blockchain giant emphasized Ethereum's extensive developer community and transparent operations, urging the SEC to reconsider its stance.

Consensys Challenges SEC's Ethereum ETF Concerns, Touts Superior Blockchain Security

In a recent report by Cointelegraph, Consensys responded to the US Securities and Exchange Commission's (SEC) inquiry into potential fraud and manipulation risks associated with Ethereum's proof-of-stake system, precisely spot Ether exchange-traded funds.

In a comment letter to the regulatory agency, Consensys, the blockchain and Web3 software development company behind the popular MetaMask wallet, stated that concerns about fraud and manipulation are unfounded.

Consensys stated in a blog post, "In fact, Ethereum's PoS implementation meets and even exceeds the security of Bitcoin's proof-of-work (PoW), which underlies Bitcoin-based ETFs that have already been approved for trading by the SEC."

The Ethereum infrastructure company outlined the benefits of Ethereum over Bitcoin, including its faster block finality, greater environmental sustainability, higher attack costs, stakeholder dominance, deterrent division of responsibilities between proposers and attesters, and penalties for validator rule violations.

Consensys emphasized that Ethereum runs on a completely open and transparent blockchain with a more extensive developer community than Bitcoin. Consensys asked the SEC to recognize that Ethereum has more security features than the Bitcoin-based ETPs that the SEC had previously approved.

It's still being determined if a spot Ether ETF will be approved in May of this year, even though spot Bitcoin ETFs are incredibly popular.

Spotlight on SEC as Deadline Approaches for VanEck's Pioneering Spot Ether ETF Decision

VanEck's investment vehicle will be the first to be approved or denied by the SEC in the upcoming round of spot ETH ETF applications, with the final deadline being May 23. While several experts appeared optimistic about approval in 2023, others have suggested that the commission may reject applications in 2024.

Spot Ethereum ETF applications are pending approval or rejection from several firms, including Hashdex, ARK 21Shares, and Fidelity. In October 2023, the SEC started to approve investment vehicles linked to Ether futures.

Cryptocurrency traders are speculating whether the US SEC will approve spot Ether ETFs by May 31. On the prediction market, wagers on the ETF results have totaled at least $12 million. On January 10, the SEC finally gave the go-ahead for the trading and listing 11 spot Bitcoin ETFs.

According to a source, Grayscale, an investment management company, is confident that the SEC will favor spot Ether ETFs by May. Craig Salm, Grayscale's chief legal officer, stated on March 25 that the SEC's alleged "lack of engagement" with applicants is not a reliable indicator of an ETF's approval status.

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