Consensys, the software company behind MetaMask digital wallet, is calling on U.S. regulators to recognize the advanced safeguards inherent in the design of Ethereum (ETH).
The Fort Worth, Texas-based firm penned a letter in response to the U.S. Securities and Exchange Commission’s (SEC) recent request for public comments on Nasdaq’s pending application for a rule change to permit the trading of iShares Ethereum Trust.
In the letter, Consensys explained why regulatory concerns about Ethereum’s susceptibility to fraud and manipulation are unfounded.
The company also argues that several key aspects of Ethereum’s proof-of-stake (PoS) implementation make it more resistant to tampering than the Bitcoin (BTC) proof-of-work (PoW) consensus model, which underlies Bitcoin-based exchange-traded products previously approved by the SEC.
The regulatory body’s request, issued on March 8, sought feedback on various aspects of Ethereum, including its proof-of-stake consensus mechanism and the concentration of control or influence by a few individuals or entities. It specifically inquired whether these features raise unique concerns about Ethereum’s susceptibility to fraud and manipulation.
One of the highlights of Consensys’ comment letter is Ethereum’s faster block finality under PoS, which ensures provable transaction finality within a shorter timeframe than PoW. Additionally, Ethereum’s PoS relies on a distributed and randomized validation process that prevents large stakeholder control, thus mitigating the risk of manipulation.
The blockchain technology company also emphasized Ethereum’s slashing penalties for validators who violate protocol rules and the network’s Byzantine fault tolerance, making it significantly more costly to attack Ethereum than Bitcoin.
Moreover, it highlighted Ethereum’s environmental benefits, noting that the network’s consensus mechanism is more environmentally friendly than Bitcoin’s.
In the letter, Consensys urged the SEC to approve spot Ethereum ETFs. The company emphasized its commitment to onboarding the next billion users to web3, stating that their comment letter is a step towards driving progress and providing relevant and useful information to the public.
The company expressed its readiness for ongoing, constructive dialogue with the SEC and its staff on the issue.
Other than Consensys, other players in the crypto space have also had their say regarding an Ethereum ETF. In early March, reports surfaced that Coinbase had met with the SEC to discuss a proposal by Grayscale for an ETH exchange-traded fund.
Per the reports, Coinbase made a presentation to the regulatory body where it committed to putting in place a surveillance sharing agreement with the Chicago Mercantile Exchange (CME) to check for any fraud or manipulation of the Ethereum ETF market if approved.
This news is republished from another source. You can check the original article here