ConsenSys, a prominent player in the blockchain and Web3 software space, has filed a persuasive opinion with the Securities and Exchange Commission (SEC), recognizing the advanced safeguards inherent in Ethereum's design and recommending Spot Ethereum. It asked for approval for exchange-traded funds. (ETF).
ConsenSys’ argument for Ethereum ETF approval
In its comment letter to the SEC, ConsenSys addressed concerns raised by the commission regarding Ethereum's proof-of-stake (PoS) consensus mechanism and the potential for fraud and manipulation.
In its response to regulators, ConsenSys asserts that the SEC's scrutiny and concerns are “completely unfounded” given that Bitcoin-based ETFs have already been approved for trading by the SEC. They argue that the anti-fraud and anti-manipulation mechanisms present in Ethereum's PoS are more robust and exceed the resilience of Bitcoin's PoW consensus model to tampering.
The comment letter highlights key reasons why the SEC should move forward with approval. ConsenSys claimed that Ethereum's move to PoS allows for provable transaction finality, ensuring that blocks are irreversibly confirmed in a shorter time frame compared to PoW systems.
Its PoS model separates the role of block validators, which prevents centralized control. They claim this reduces the risk of tampering and adds an extra layer of security. BlackRock CEO Larry Fink also mentioned another consideration regarding its classification: Even if Ethereum is classified as a security, he believes an Ether-based spot ETF could still be launched. He said there was.
Comparison of Ethereum's Byzantine fault tolerance and Bitcoin's fault tolerance
Web3 software company states that Ethereum's Byzantine Fault Tolerance (BFT) is higher than Bitcoin. They argue that Ethereum's mechanism to penalize validators who violate protocol rules by reducing their stake acts as a deterrent against malicious behavior. Additionally, his PoS model for Ethereum is more energy efficient and environmentally friendly than his PoW for Bitcoin.
ConsenSys told regulators ahead of potential approval: Previously approved by the SEC. ”
The Ethereum ETF has been consistently delayed by the SEC, but officials expect a decision to be made in the coming months. In any case, Ethereum continues to gain momentum as the second largest cryptocurrency with a price of $3,502.43.
