House Members Press SEC for Details on Prometheum's Ether Custody Plans

A recent Crowdfund Insider report states that House Financial Services Committee Chairman Patrick McHenry, along with Digital Assets Subcommittee Chairman French Hill and Oversight Subcommittee Chairman Bill Huizenga have requested information from the SEC regarding Prometheum’s plans to provide custody for Ether.

Prometheum has been granted Special Purpose Broker Dealer (SPBD) status and approval to operate an ATS, aiming to become a digital trading venue for digital assets, classified as securities. While the SEC previously deemed Ethereum/Ether not a security due to its decentralization, the transition to proof of stake might have prompted reconsideration.

The committee members have asked SEC Chairman Gary Gensler to clarify the SEC's stance on Prometheum’s announcement to offer Ether custody services. Prometheum CEO Aaron Kaplan recently disclosed this intent to Fortune.

In March, Republican committee members requested more information on Prometheum from Chairman Gensler but found the response inadequate. They are now reiterating their questions.

The letter states: "Prometheum’s announcement to offer custody services for ETH raises questions about permitted activities for SPBDs, rooted in regulatory uncertainty surrounding ETH. Our concerns, outlined in our March 26, 2024 letter, persist due to the SEC’s lack of response, increasing our unease about the precedent set by the SEC, FINRA, and Prometheum."

"The strong likelihood that the SEC and FINRA discussed SPBD permitted activities during Prometheum’s application process prompts us to seek further information and communications for clarity on the SPBD framework."

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