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The offering may push the SEC to classify Ethereum as a security.
Prometheum, a crypto trading platform approved by the Securities and Exchange Commission (SEC), is set to offer custodial services for Ethereum, initially targeting institutional clients, according to a press release published today.
The new move follows Prometheum’s acceptance as a Special Purpose Broker-Dealer (SPBD) by the Financial Industry Regulatory Authority (FINRA), which allows the company to custody, clear, and settle digital asset securities.
As reported, institutional clients, including asset management firms, hedge funds, Registered Investment Advisors (RIAs), banks, and other financial institutions, can sign up for Prometheum’s custodial services. The official launch of its custodial services is expected to come this quarter.
ETH will be custodied at a FINRA member firm and an SEC-registered broker-dealer. Prometheum also intends to broaden its custodial portfolio to include leading security tokens and utility-driven coins, with more details to be announced soon.
Aaron Kaplan, Co-CEO of Prometheum, emphasized the compliance and regulatory rigor behind this initiative.
“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 stated. “Our unwavering commitment to compliance and investor safeguarding drives this milestone, signifying substantial progress towards establishing a new paradigm for blockchain-enabled market infrastructure.”
Furthermore, Prometheum plans to expand its offerings to include trading, clearing, and settlement services for retail and institutional clients within 2024, aiming to create a one-stop shop for all market participants.
Regulatory crossroads
Prometheum’s new services spark speculation about Ethereum’s classification as a security. Fortune suggests it could be a strategy to pressure regulators, as the SEC hasn’t directly defined Ethereum’s legal status, unlike other cryptocurrencies. By operating within existing laws, Prometheum’s approach might compel the SEC to finally make a definitive ruling on Ethereum.
The launch of Prometheum’s custodial service could force the SEC to finally address the long-standing ambiguity surrounding Ethereum’s classification, Fortune cited legal experts.
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