New York-based digital asset company Promethium has launched the first SEC-compliant Ethereum (ETH) custody service, marking another milestone in regulatory compliance in the industry.
This service treats ETH as a security compliant with U.S. Securities and Exchange Commission (SEC) regulations.
Prometheum Pioneers Regulated Ethereum Storage Service
Promethium, known for its controversial stance on digital assets, has launched ETH custody services with a select group of companies. The full-scale launch is scheduled for the first week of June. Co-CEO Aaron Kaplan highlighted that this is the first time that an investment contract involving digital assets has been stored and treated under securities laws.
“This launch is an important step towards a regulated and secure digital asset market,” Kaplan said.
Prometheum designed its services for institutional clients such as asset management companies, hedge funds, banks, and registered investment advisors. The company offers comprehensive digital asset management under strict regulatory compliance and aims to expand to retail customers within 2024.
Read more: Ethereum (ETH) Price Prediction 2024/2025/2030
In 2023, Promethium received special purpose broker-dealer licenses from the Financial Industry Regulatory Authority (FINRA) and the SEC. Despite this achievement, many industry leaders oppose classifying cryptocurrencies as securities, which is in contrast to Promethium's approach.
Regulatory conflicts add to this uncertainty. SEC Chairman Gary Gensler has suggested that Ethereum could become a security. But Rostin Behnum, chairman of the Commodity Futures Trading Commission, considers it a commodity. In March, House Financial Services Committee Chairman Patrick McHenry and House Agriculture Committee Chairman Glenn Thompson asked the SEC to clarify the classification of ETH.
Promethium believes that there is a clear legal path for cryptocurrencies, and we demonstrate this through our Ether custody services. Promethium's move could set a precedent for other companies as the SEC continues to tighten regulations. If successful, it could serve as a model for other digital asset companies seeking compliance and testing the SEC's regulatory framework.
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