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Home»ETHEREUM NEWS»Prometheum’s Ethereum Custodial launch puts SEC’s classification of ETH in the spotlight
ETHEREUM NEWS

Prometheum’s Ethereum Custodial launch puts SEC’s classification of ETH in the spotlight

By Crypto FlexsFebruary 9, 20244 Mins Read
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Prometheum’s Ethereum Custodial launch puts SEC’s classification of ETH in the spotlight
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Prometheum, an “alternative” trading platform for cryptocurrency “securities” assets, recently announced the launch of its custodial service for Ethereum (ETH). This move has important implications for its legal status. second largest cryptocurrency Based on market capitalization.

Fortune Magazine reported that the company’s strategy is to force regulators, particularly the Securities and Exchange Commission (SEC), to recognize Ethereum as a security.

The SEC has come under pressure to establish the legal status of Ethereum.

according to the report, PrometheumNew York-based has positioned itself as a compliant player in the cryptocurrency industry by claiming to have found a way to operate within existing laws.

The company received regulatory approval to operate as an alternative securities trading platform in 2021. It received further attention after obtaining a special purpose broker-dealer license from the Financial Supervisory Service (FINRA).

This license allows them to act as a broker-dealer in “digital asset securities,” a designation no other company has achieved. This has led to demands from cryptocurrency companies and even members of the U.S. Congress: inspection Enter the company’s activities.

Previously, the SEC refrained from definitively classifying Ethereum as a security, despite declaring several other cryptocurrencies as securities.

Prometheum argues that it is consistent with the SEC’s assessment that most cryptocurrencies are securities and that Ethereum can be listed as a security under an exemption called Rule 144, which is typically used for restricted stock trading.

that much A company in trouble Blockchain data can be used to determine whether the asset has been in circulation for more than a year, which is an important factor in claiming exemption.

What’s interesting is that Prometheum’s Ethereum custodian service could potentially force the SEC to determine Ethereum’s legal status. The fact that the company is registered with FINRA and the SEC and is prominently displayed on its website adds strength to its claim.

Legal experts and academics have speculated that the launch of Prometheum’s administration may force the SEC to rule on Ethereum’s classification. This decision could have far-reaching consequences for the cryptocurrency industry, challenging the industry’s argument that cryptocurrencies cannot operate in traditional environments. securities law.

The backlash is growing as Prometheum shakes up cryptocurrency regulation.

SEC Chairman Gary Gensler, who has stepped up enforcement efforts since the FTX collapse, emphasized the sufficiency of existing regulations when he filed a lawsuit against the exchange for failing to register.

Prometheum’s approach contrasts with other cryptocurrency exchanges, such as Coinbase, which argue that existing rules are outdated. Prometheum’s strategy has drawn criticism from the cryptocurrency industry and Republican lawmakers. accuse Gensler supports companies in advancing their regulatory agenda.

Overall, the introduction of Prometheum’s Ethereum management service has put the debate over Ethereum’s legal classification into the spotlight.

The move could force the SEC to decide whether Ethereum should be classified as a security, challenging the cryptocurrency industry’s arguments against the new law.

The success of Prometheum’s approach remains uncertain, but it is yet to be seen how subsequent SEC administrations will respond and whether institutional investors will be attracted to Prometheum’s compliance approach.

ETH’s sideways price action has taken it above $2,400 over the past 24 hours. Source: ETHUSDT on TradingView.com

today, ETH It is trading at $2,428, reflecting a slight rise of 0.5% over the last 24 hours.

Featured image from Shutterstock, chart from TradingView.com

Disclaimer: This article is provided for educational purposes only. This does not represent NewsBTC’s opinion on whether to buy, sell or hold any investment, and of course investing carries risks. We recommend that you do your own research before making any investment decisions. Your use of the information provided on this website is entirely at your own risk.

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