SEC-Licensed Prometheum Launches Custody Service Treating ETH as a Security
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SEC-Licensed Prometheum Launches Custody Service Treating ETH as a Security

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4 weeks ago

Prometheum, a digital asset trading and custody firm, has reportedly initiated a soft launch of its Ethereum (ETH) custody service.

SEC-Licensed Prometheum Launches Custody Service Treating ETH as a Security
Prometheum, a digital asset trading and custody firm, has reportedly initiated a soft launch of its Ethereum (ETH) custody service, treating digital assets as securities, according to Fortune. The controversial custody solution was made available to a few selected companies on May 17, with a full-scale launch scheduled for June. Prometheum plans to expand its services to retail clients later in 2024.

In February, Prometheum announced plans to treat Ether as a security when launching custodial services, a move that drew criticism from the crypto community. Aaron Kaplan explained that this approach allows for compliance with existing laws, stating, "It marks the first time that...an investment contract digital asset security is being custodied and treated under the securities laws."

Prometheum gained attention in June of the previous year when co-founder and co-CEO Aaron Kaplan testified before a United States House Committee, expressing support for regulating cryptocurrencies under existing securities laws. This viewpoint aligns with the Securities and Exchange Commission (SEC)'s stance on the matter.

Initially, some saw the SEC's approval of Prometheum's treatment of Ether as a negative signal for spot Ether exchange-traded funds (ETFs). However, recent reports indicate that the SEC is urging applicants to expedite their 19b-4 filings, raising hopes for the approval of spot Ether ETFs. Bloomberg ETF analysts Eric Balchunas and James Seyffart have subsequently increased their estimated odds of an approved spot Ether ETF from 25% to 75%.

Prometheum, founded by brothers Aaron and Benjamin Kaplan in 2017, gained recognition after obtaining a broker-dealer license from the SEC and the Financial Industry Regulatory Authority in June 2023.

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