New York-based Blockchain company Prometheum has made a move challenging the prevailing view on regulatory clarity in the US cryptocurrency industry. While many in the sector complain about the lack of clear regulations, Prometheum has launched the long-awaited custody service for Ethereum (ETH), arguing that a legal framework already exists for trading cryptocurrencies as securities under the US Securities and Exchange Commission (SEC) oversight.
“A Significant Milestone Achieved”
Prometheum recently launched its long-awaited custody service for Ethereum, classifying ETH as a security under SEC oversight. According to Fortune, this move aligns with SEC Chairman Gary Gensler‘s stance that existing regulations are sufficient for the cryptocurrency market. Prometheum’s co-CEO Aaron Kaplan claimed that the launch demonstrates that crypto securities can be managed within existing laws, marking a significant milestone for the industry.
For those unfamiliar, Prometheum was founded by brothers Aaron and Benjamin Kaplan and gained attention in mid-2023 after obtaining a unique broker-dealer license. This license allows it to custody crypto securities, setting it apart from competitors who argue that most cryptocurrencies should not fall under SEC jurisdiction. However, Prometheum’s approach, which includes operating an alternative trading platform under current SEC regulations, has drawn criticism from industry leaders.
Despite the criticism, Prometheum continued with its strategy, announcing in February that it would soon offer Ethereum custody services. Although the service is not yet fully available, the custody service represents a crucial first step. Prometheum aims to facilitate future cryptocurrency trading by providing a regulated environment for storing cryptocurrencies. The company’s approach has raised concerns within the crypto world, especially since the SEC’s view of ETH as a security could have significant implications for the industry.
Currently, Prometheum aims to fully launch its cryptocurrency services by early June and initiate the complete trading process within the quarter.
First Test of Operating Within SEC Regulations
This launch represents the first test of Prometheum’s strategy to operate within SEC regulations, a path that other US crypto companies like Coinbase have struggled with.
Kaplan acknowledged that the process took longer than expected but emphasized that they had no alternative but to proceed this way. Prometheum’s move to classify and manage Ethereum as a security under SEC guidelines has the potential to reshape regulatory expectations and compliance standards in the cryptocurrency industry.
