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<p><span style="font-weight: 400;">House Republicans are urging the US Securities and Exchange Commission (SEC) to clarify its stance on Prometheum’s plan to p</span>rovide custody services for Ethereum’s ETH token (ETH) to institutional clients.</p>
<p>That leaves ”an alarming situation” in which Prometheum intends to offer custodial services for ETH ”under a regime that does not permit such activity,” <span style="font-weight: 400;">the Republican chairmen of the House Financial Services and Agriculture committees wrote in a Mar. 26 </span><a href="https://financialservices.house.gov/uploadedfiles/2024-03-26_fsc_hac_prometheum_letter_-_final_final_ab.pdf" rel="noopener noreferrer nofollow"><span style="font-weight: 400;">letter</span></a><span style="font-weight: 400;"> to SEC chair Gary Gensler.&nbsp;</span></p>
<p><img decoding="async" src="https://mms.businesswire.com/media/20221026005178/en/1613821/23/prometheum_pressrelease_whitebackground_v2.jpg" alt="Prometheum Launches SEC Registered Market for Digital Asset Securities | Business Wire"></p>
<h2 id="span-style-font-weight-400-sec-has-not-yet-said-whether-ethereum-is-a-security-span"><span style="font-weight: 400;">SEC Has Not Yet Said Whether Ethereum Is A Security</span></h2>
<p><span style="font-weight: 400;">The SEC has not yet clarified whether ETH is a security or a commodity. However, Prometheum’s launch of an ETH custody service would conclude that the altcoin leader is a security. </span></p>
<p><span style="font-weight: 400;">Rep. Glenn Thompson (R-Penn.), together with Rep. Patrick McHenry (R-N.C.), argued in the letter that ETH is not a security. As such, it will be illegal for the securities firm Prometheum to handle the asset.</span></p>
<p><span style="font-weight: 400;">The SEC seemed to have initially agreed that ETH fits within the CFTC’s commodities jurisdiction, similar to Bitcoin. Agency officials later suggested that the decision around ETH is not yet clear, especially after the Ethereum network transitioned from a Proof of Work consensus to a Proof of Stake mechanism.&nbsp;</span></p>
<p><span style="font-weight: 400;">“Your unwillingness to clarify the treatment of ETH only exacerbates the confusion and uncertainty regarding ETH’s classification,” the letter said.</span></p>
<p><span style="font-weight: 400;"> Adding to the confusion is the fact that ETH futures products have already started trading on CFTC-regulated platforms, while the SEC also approved ETH futures ETFs (exchange-traded funds) to begin trading in 2023.</span></p>
<p><span style="font-weight: 400;"> Prometheum proceeding with their ETH custody services “could have irreparable consequences for the digital asset markets,” the Congressmen said in the letter.</span></p>
<h2 id="span-style-font-weight-400-a-turning-point-in-the-treatment-of-crypto-companies-in-the-us-span"><span style="font-weight: 400;">A Turning Point In The Treatment Of Crypto Companies In The US</span></h2>
<p><span style="font-weight: 400;">The launch of the ETH custody service could also represent a potential turning point in how the US treats crypto companies. On several occasions, Gensler has referred to Prometheum as the perfect example of a company that is willing to jump through the necessary regulatory hurdles to legally handle crypto in the US.&nbsp;</span></p>
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 <p lang="en" dir="ltr">Exciting times are ahead! Our institutional custody service for ETH is just around the corner. Institutions are invited to sign up in anticipation of our upcoming launch at <a href="https://t.co/c6VNTsmfoL" rel="noopener noreferrer nofollow">https://t.co/c6VNTsmfoL</a>. Keep an eye out for more details!</p>
 <p>— Prometheum (@PrometheumInc) <a href="https://twitter.com/PrometheumInc/status/1761119453524222091?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">February 23, 2024</a></p>
</blockquote>
<p><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></p>
<p><span style="font-weight: 400;">If the SEC gives Prometheum the green light, it might also undermine the crypto sector’s argument that it is nearly impossible for crypto companies to operate under current SEC rules.</span></p>
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House Republicans Urge The SEC To Clarify Position On Prometheum’s Plan To Provide Custody For ETH

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