Coinbase, a leading crypto exchange in the United States, has shown unwavering support for Grayscale's proposal to transform its Ethereum Trust into a spot Ether exchange-traded product (ETP).

At the heart of Coinbase's support is their argument that Ether (ETH) should not be classified as a security.

Paul Grewal, Coinbase's chief legal officer, emphasised this in a 27-page letter to the Securities and Exchange Commission (SEC) on Feb. 22.

This letter provided detailed legal, technical, and economic explanations to support the approval of an Ether-based ETP. In their communication, Coinbase put forth five key points to make their case.

Most notably, they argued that ETH should be considered a commodity, a stance that finds backing in several quarters: the approval of ETH futures by the Commodity Futures Trading Commission, various statements by SEC officials, and several court decisions.