Prometheum to Launch Ethereum Custody Service in March
Prometheum, the only digital asset service provider registered with the US SEC, is set to offer its first crypto product in March: Ethereum custody. This launch has significant implications for the industry as it could provide clarity on whether Ethereum is considered a security by the SEC. The company’s compliance with regulatory standards has been praised by the SEC, although there are questions regarding its origins and connections to federal enforcement agencies.
Prometheum’s Path to SEC Compliance
In May 2023, Prometheum received approval from the SEC-adjacent Financial Industry Regulatory Authority (FINRA) to operate as a Special Purpose Broker-Dealer (SPBD). This designation allowed Prometheum to offer custody services for cryptocurrencies. In January 2024, its subsidiary Prometheum Capital LLC received FINRA approval to clear and settle crypto trades for its affiliate, Prometheum Amber ATS. The company announced that it would launch its custody platform in Q1 of this year.
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How the Industry Views Prometheum
Many players in the crypto industry remain skeptical of Prometheum due to their concerns about existing securities laws and the lack of clear guidelines from the SEC. Gemini co-founder Tyler Winklevoss pointed out that Prometheum had not launched a product in its first six years of existence and highlighted its staff’s former SEC and FINRA backgrounds. Legal counsel Rodrigo Seira contradicted Prometheum’s claim that ATS status allows it to sell unregistered securities, stating that an ATS cannot facilitate trading for unregistered securities without a valid exemption.
Hot Take: A Controversial Move
Prometheum’s decision to offer Ethereum custody as its first product is controversial due to the SEC’s lack of clarity on whether Ethereum is a security. The choice raises questions about the regulatory landscape and how Prometheum plans to navigate it. As the only SEC-registered crypto company, Prometheum’s launch of an Ethereum custody service will be closely watched by industry participants and regulators alike. It has the potential to shape future discussions on the classification of cryptocurrencies and the application of existing securities laws.
