Last week, the largest cryptocurrency exchange in the United States engaged in discussions with the Securities and Exchange Commission regarding Grayscale's proposed Ethereum (ETH) exchange-traded fund (ETF).

According to documents filed by the regulator on Wednesday, publicly-listed Coinbase presented information to the top regulator on Wall Street concerning Grayscale's proposed product.

In October, Grayscale, a cryptocurrency fund manager, submitted an application to the SEC seeking approval to convert its Grayscale Ethereum Trust (ETHE) into a spot ETH ETF. This ETF, if approved, would offer investors direct exposure to the second-largest cryptocurrency, Ethereum, trading on a stock exchange, thus enabling investors to purchase shares tracking ETH's price.

Coinbase's presentation highlighted discussions surrounding potential market manipulation, emphasizing its plans for comprehensive surveillance-sharing agreements. This would include collaboration with the Chicago Mercantile Exchange to facilitate surveillance for fraudulent activities and manipulation within the market.

The presentation also underscored the robustness of Ethereum's spot markets, suggesting that they are resilient to fraud and manipulation. It noted Ethereum's inherent mechanisms that substantially minimize susceptibility to fraudulent activities and market manipulation.

In January, the SEC granted approval for 11 spot Bitcoin (BTC) ETFs to commence trading. This marked a significant milestone after years of denials, leading to the successful trading of these investment vehicles on stock exchanges, attracting substantial inflows of investment.

Grayscale, among other fund managers, received approval for its Bitcoin Trust, subsequently converting it into a spot Bitcoin ETF. Now, alongside other reputable financial institutions, Grayscale is seeking approval from the SEC to launch similar ETFs for Ethereum, the second-largest digital currency by market capitalization.

A recent report from British multinational bank Standard Chartered suggested that Ethereum ETFs could potentially receive approval from the SEC by May, predicting a potential surge in asset prices as a result.

On Friday, Ethereum reached $4,000 per coin for the first time since 2021, reflecting growing investor interest in the digital asset. As of now, Ethereum's price stands slightly below this milestone at $3,948, according to CoinGecko data.