Prometheum is trying to break new ground as an SEC-compliant crypto firm. It is starting its business with a custody operation that aims to start by holding customers’ ETH. In this context, the only SEC-approved crypto platform chose the leading altcoin project as its first product.
The only crypto platform approved by the SEC said it is the ‘leading altcoin’!
Prometheum Inc. it still stands alone as the only crypto securities platform registered in the US. It announced that the first digital asset it will process for customers will be the leading altcoin Ethereum (ETH). Meanwhile, the sector is the target of criticism and controversy. Prometheum very recently cleared the final regulatory hurdle to open its custody operation. After this he is yet to earn any income. However, co-CEOs Aaron and Benjamin Kaplan said they will assume custody of customers’ ETH by the end of next month. Aaron Kaplan said in an interview:
We want to be able to serve the largest market cap and most liquid token. Ethereum is first, and much more will follow.
What does the cryptocurrency platform aim for?
Prometheum represents a high-stakes test case in US crypto. The company is the first platform to attempt to establish itself as a special-purpose broker-dealer and crypto custodian through the Financial Industry Regulatory Authority, bypassing all compliance hurdles of the U.S. Securities and Exchange Commission (SEC). Prometheum’s executives said they plan to open the doors to alternative trading systems next quarter, a type of U.S. trading venue similar to a full-fledged exchange but with fewer compliance requirements.
At that point, the company will either prove its executives’ claims that crypto can be processed in the US in a way that would appease securities regulators, or it will vindicate naysayers who argue that it is impossible to meet the SEC’s expectations. The risks are high not only for Prometheum and the rest of the industry, but also for the government agency, which has been claiming for years that this is a viable way for crypto firms to “come and register” to do business in the United States. Because it will say, “Prometheum came and signed up.” However, it is unclear what will happen next. And we will continue to test these murky waters. Perhaps it will also help determine whether the SEC will consider ETH as a security.
What if the SEC says “Ethereum is a security”?
Prometheum’s choice of ETH as its first asset will likely come with its own complications. He did not choose Bitcoin (BTC), which the SEC has expressly declared is not a security. In contrast, he favored ETH, the altcoin on which the SEC was not clear. It is unclear what stance the SEC will take on Ethereum. Meanwhile, the SEC’s sister agency, the Commodity Futures Trading Commission (CFTC), has already slapped the label on Ethereum. The CFTC has declared that ETH is strictly a commodity.
Prometheum is registered to hold crypto securities and is not in the commodity business. Ben Kaplan said that the company will comply with whatever the SEC says about ETH. In this regard, Kaplan said, “The CFTC is not our regulator. “When the SEC tells us, ‘This is not a security,’ then we’re going to have problems.” said.
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