Consensys: SEC’s Spot Ethereum ETFs Concerns Are Baseless

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Consensys responded to the SEC’s inquiry regarding potential fraud and manipulation risks associated with Ethereum’s proof-of-stake system, particularly in relation to spot Ether exchange-traded funds (ETFs).

In a comment letter to the SEC, Consensys, the blockchain and Web3 software development company behind MetaMask wallet, dismissed concerns about fraud and manipulation, stating they are unfounded.

Consensys elaborated in a blog post, highlighting that Ethereum’s proof-of-stake implementation not only meets but surpasses the security of Bitcoin’s proof-of-work, which is the basis for Bitcoin-based ETFs already approved by the SEC.

The firm emphasized Ethereum’s advantages, including quicker block finality, a division of responsibilities among participants to prevent stakeholder dominance, higher attack costs, penalties for validator rule violations, and better environmental sustainability compared to Bitcoin.