Key points:
- Consensys has asked the SEC to recognize the advanced safeguards inherent in Ethereum’s design.
- The blockchain firm proposed in response to the SEC’s request for comments on ETH ETF.
- According to Consensys, Ethereum’s PoS exceeds the security of Bitcoin’s PoW.
Consensys, a leading blockchain software technology company, has asked the U.S. Securities and Exchange Commission (SEC) to recognize the advanced safeguards inherent in Ethereum’s design. The company proposed this in response to the SEC’s request for comments on the potential approval of Ethereum ETF applications.
In line with the applications, the SEC asked whether Ethereum’s Proof of Stake (PoS) raises “unique concerns” of fraud and manipulation that the agency should consider. Responding to the question, Consensys noted such concerns are wholly without merit.
The blockchain company published a letter explaining how Ethereum’s PoS implementation meets and exceeds the security of Bitcoin’s Proof of Work (PoW). According to Consensys, Bitcoin’s PoW underlies Bitcoin-based ETFs that the SEC has already approved for trading.
In the comment letter, Consensys noted that the Ethereum PoS has strong built-in anti-fraud and anti-manipulation mechanisms. The company highlighted how this implementation surpasses Bitcoin’s PoW consensus model by being more resistant to tampering.
Some of Consensys’ highlights include Ethereum’s faster block finality and the blockchain’s distributed and randomized validation process that prevents pronounced stakeholder control. Consensys highlighted other Ethereum properties, like the total cost of attack, slashing penalties, and increased security alongside environmental benefits, as elements for Ethereum’s prevention mechanism against fraud and manipulation.
Furthermore, Consensys noted that the blockchain’s decentralized community and transparency enhance its security protection. The blockchain company emphasized the advanced safeguards inherent in Ethereum’s design. It cited that such safeguards will meet and exceed the exemplary security and resilience safeguards underlying Bitcoin-based ETPs already approved by the SEC.
Consensys publicized plans to onboard billions of users to web3. The blockchain firm is furthering this mission through public advocacy on the pending Ethereum ETF approval. Hence, the comment letter is a step towards driving progress and providing relevant information to the public.