FINRA-Registered Digital Asset Platform Prometheum to Launch Ether Custody Services

FINRA-Registered Digital Asset Platform Prometheum to Launch Ether Custody Services

Prometheum, the first U.S. special purpose broker-dealer authorized to custody, clear, and settle digital asset securities, disclosed that it is now providing custodial services for the cryptocurrency ethereum. This announcement arrives amidst a period where the prominent crypto asset, ethereum, remains without a definitive classification as a security by the U.S. Securities and Exchange Commission (SEC).

Prometheum Reveals Ethereum Custody Plans

On Wednesday, Prometheum revealed its plans to start custodial services for ethereum (ETH) and has initiated the signup procedure for asset management firms, hedge funds, registered investment advisors (RIAs), banks, and various financial entities in preparation for the forthcoming launch of custodial services.

Last year, Prometheum captured widespread attention when its co-CEO, Aaron Kaplan, delivered testimony to the U.S. House of Representatives Committee on Financial Services (FSC) on June 13, 2023. Following the testimony, U.S. Senator Thomas Tuberville (R-AL) issued an open letter to U.S. Attorney General Merrick Garland and SEC Chairman Gary Gensler, raising alarms over the potential of “false testimony.”

In addition, Democratic Representative Ritchie Torres from New York dispatched letters to U.S. Comptroller General Gene Dodaro and SEC Inspector General Deborah Jeffries concerning Prometheum’s licensing. This series of events prompted the FSC, under the leadership of Chairman Patrick McHenry (R-NC), to initiate a probe into Prometheum.

In January, the Financial Industry Regulatory Authority (FINRA) authorized Prometheum to clear digital assets. With this approval in place for launching ether custodial services, Prometheum further announced its intention to provide trading, clearing, and settlement services to both retail investors and institutional clients this year.

“Prometheum Capital’s custodial services, starting with ETH, are tailored to meet the stringent regulatory and compliance standards promulgated by the federal security laws,” Kaplan said in a statement on Wednesday.

Prometheum’s decision to custody ether is noteworthy, given that ethereum (ETH) has yet to be explicitly classified as a security by the SEC, whereas bitcoin (BTC) is broadly acknowledged as a commodity.

While the SEC and Chairman Gensler have remained silent on the matter, Chairman Rostin Behnam of the U.S. Commodity Futures Trading Commission (CFTC) has informed Congress of his view that ether qualifies as a commodity. Furthermore, Prometheum’s announcement arrives amid the SEC’s ongoing deliberations on whether to sanction a spot ETH exchange-traded fund (ETF).

What do you think about Prometheum offering ethereum custody services in 2024? Share your thoughts and opinions about this subject in the comments section below.