Digital Asset Trading and Custody Firm Promethium Reportedly Launching Custody Service
Digital asset trading and custody firm Prometheum has reportedly launched its controversial custody service for Ethereum (ETH), which treats digital assets as collateral.
According to a May 20 Fortune report, the incubation solution was rolled out to a few select companies on May 17 and is expected to roll out more widely in June.
Prometheum targets its services towards asset management firms, hedge funds, banks and registered investment advisors and aims to expand to retail clients later in 2024.
Promethium was thrust into the spotlight in June last year after its co-founder and co-CEO Aaron Kaplan testified before a committee of the US House of Representatives, appearing to support the regulation of cryptocurrencies in within the framework of existing securities laws – a view also shared by the Securities and Exchange Commission. commission.
In February, Prometheum suggested it would treat Ethereum as a security when it launched custodial services on its platform later in the year – sparking criticism from the cryptocurrency community.
“It eliminates a lot of the arguments that things can’t be done under current laws,” said Aaron Kaplan, one of the company’s principals.
“This is the first time that digital assets in an investment contract have been secured and treated in accordance with securities laws.”
Some initially viewed the SEC’s approval of Prometheum and its treatment of Ethereum as a bad sign for Ethereum ETFs.
However, reports have since emerged that the SEC is asking applicants to expedite their 19b-4 applications, which has once again raised hopes.
This led Bloomberg ETF analysts Eric Balchunas and James Seyfart to increase their estimated ratings for the approved Ether ETF from 25% to 75%.
about: If the SEC approves Ethereum ETFs, many of them will “fall into extreme stealth.”
Brothers Aaron and Benjamin Kaplan founded Promethium in 2017, which remained relatively unknown until June 2023, when it received a broker’s license from the Securities and Exchange Commission and the Financial Industry Regulatory Authority.
However, the launch of Promethium’s Ethereum custody service could now cause a rift between the Securities and Exchange Commission and the US commodities regulator.
The Commodity Futures Trading Commission, which has long considered ether as a commodity, warned in March that such a product would put U.S. financial market rules in direct conflict.
“This would then put our registrants and our exchanges that list Ethereum as futures contracts, in non-compliance with SEC rules rather than CFTC rules,” CFTC Chairman Rustin Behnam said at the time ( CFTC).
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