On March 6, Coinbase and Grayscale met with the SEC to discuss concerns regarding the transformation of Grayscale's Ethereum Trust into a spot ETF.

Recently, representatives of the US Securities and Exchange Commission (SEC) met with cryptocurrency companies Coinbase and Grayscale to talk about changing the rules governing the introduction of spot Ether exchange-traded funds (ETFs).

Grayscale is trying to transform its Ethereum Trust, which keeps track of Ether ETH's market price $ 3,950 tickers down

— into an ETF, in a manner akin to its January conversion of its Bitcoin Trust into an ETF. Following the conclusion of the proposal's comment period, a meeting was held on March 6 to discuss concerns over potential market manipulation should the fund be approved.

In a presentation made public by the SEC, Coinbase contended that since Ether contains "mechanisms," the same justification that supported the establishment of Bitcoin ETFs should also apply to the token for limiting significant ETH's susceptibility to fraud and manipulation

The agreement between Coinbase and the Chicago Mercantile Exchange (CME) for surveillance sharing is the subject of another presentation point. The SEC requested the implementation of the mechanism for Bitcoin ETFs in order to enhance trade oversight.

Nate Geraci of ETF Store on X pointed out that Coinbase also highlighted the similarity between Ether futures and spot markets to the Bitcoin market. "I'm not sure what the grounds would be for disapproval of spot Ether ETFs, especially considering that the SEC approved CME-traded Ether futures ETFs."

Additionally, Grayscale is putting up a second ETF for Ether futures trading. Spot market assets are traded instantly, which is the primary distinction between them and futures markets.

In contrast, contracts to purchase or sell assets at a future date for a defined price are formed in the futures market.

According to some observers, Grayscale might be using their application for a futures ETF as a "trojan horse" to pressure the SEC into approving its spot Ether ETF.

A number of asset managers are requesting approval for a spot Ether ETF, including Invesco, Galaxy Digital, Fidelity, Franklin Templeton, and BlackRock. It is anticipated that the SEC will make a ruling in May.

According to Eric Balchunas of Bloomberg, asset managers are still unaware of the regulators' opinions regarding the cryptocurrency investment vehicle. "Normally, I would say that this was a good sign, but as far as I know, the Staff hasn't commented to the issuers yet. This isn't good because we've already had comments from them on BTC ETFs," Balchunas stated.