Coinbase chief legal officer Paul Grewal has slammed a letter by two United States senators urging the SEC to more tightly regulate Bitcoin ETFs and reject any further crypto ETF applications.

In a March 15 post to X, Grewal criticized the senator’s recent March 11 letter — which had claimed the approval of further crypto ETFs beyond Bitcoin would expose investors to “enormous risks.”

“Respectfully Senators, the evidence points exactly the opposite way,” said Grewal in response.

Grewal explained that the market for many cryptocurrencies smaller than Bitcoin, notably Ether (ETH), demonstrated quality metrics that “exceed even the largest traded equities.”

“ETH’s spot market is deep and liquid– only two S&P 500 stocks have higher notional dollar trading volume,” added Grewal.

Grewal added there was direct evidence that Ether’s futures and spot markets were just as correlated as Bitcoin’s.

“When compared to Bitcoin, ETH’s future and spot market demonstrate EXACTLY the same type of high and consistent correlation that would enable market surveillance.”

On March 9, Coinbase and crypto asset manager Grayscale met with SEC officials to discuss a rule change for the launch of spot Ether ETFs, where Coinbase argued that if the SEC approved Bitcoin ETFs, they should approve Ether ETFs as well.

Some analysts have suggested that Grayscale may be using its futures ETF application as a “trojan horse” to corner the SEC into approving its spot Ether ETF.

Several industry pundits, including VB Capital general partner Scott Johnson and Bloomberg ETF analyst Eric Balchunas, have predicted the SEC is looking to reject the pending ETH ETFs on the grounds of “correlation” — the difference between the price of spot and futures.

Nate Geraci, the president of the ETF Store said it was clear that Coinbase was now “going all in” on supporting spot Ether ETFs, hinting that conflict between the crypto exchange and the regulator could soon escalate ahead of the May 23 deadline for an ETH ETF decision.

“None of this is about ‘protecting investors’ It’s all about politics. Sad. It’s all sour grapes b/c investors want exposure to spot btc ETFs,” Geraci said in a follow-up post.

Geraci added it was clear the SEC was gearing up to reject the pending Ether ETF applications on the grounds of correlation, but noted that they had approved Ether futures ETFs.

Related: BlackRock’s Bitcoin ETF sets daily volume record as BTC recoups slump

In the March 11 letter addressed to SEC Chair Gary Gensler, the two democratic senators, Jack Reed and Laphonza Butler, claimed that any further crypto ETF approvals would see investors exposed to risks stemming from “thinly traded” markets rife with fraud and manipulation.

Alongside a series of requests for more stringent regulatory oversight into Bitcoin ETFs, Reed and Butler added that markets for cryptocurrencies smaller than Bitcoin were “far more exposed to misconduct.”

There are currently eight proposed spot Ether ETF applications awaiting approval by the SEC, and there have been hopes that other altcoins could eventually tread a similar path.

Magazine: ‘Crypto is inevitable’ so we went ‘all in’ — Meet Vance Spencer, permabull