Consensys, the blockchain and web3 software development company behind the famous MetaMask wallet, has called on the United States Securities and Exchange Commission (SEC) to consider Ethereum's superior qualities over Bitcoin when evaluating applications for spot Ethereum ETFs.
The SEC had requested information on whether Ethereum's proof-of-stake (PoS) consensus mechanism raises “unique concerns” about fraud and manipulation. In response, Consensys sent a comment letter to the regulator, stating that such concerns were “completely unfounded”.
In a blog post, Consensys explained that Ethereum's PoS system not only meets but exceeds the security of Bitcoin's Proof of Work (PoW) system, which forms the basis for Bitcoin-based ETFs approved for trading by the SEC.
The company claimed that Ethereum has several advantages over Bitcoin. According to the statement, Ethereum features faster block finalization than the Bitcoin network and separation of duties between bidders and participants, which helps prevent large-scale investor control. It also has a higher attack cost than Bitcoin, penalizes validators who violate protocol rules, and is more environmentally friendly than Bitcoin.
Consensys also argued that Ethereum's active developer community is larger than Bitcoin's and that its blockchain is fully public and transparent.
“We urge the SEC to recognize the advanced security measures built into Ethereum's design,” Consensys wrote, adding:
“These measures not only meet but exceed exemplary security and resilience measures underlying Bitcoin-based ETPs previously approved by the SEC.”
*This is not investment advice.