Prometheum, a digital asset trading and custody firm, has reportedly soft-launched its controversial Ether (ETH) custody service. This service treats digital assets as securities. According to Fortune, the custody solution was initially rolled out to a few select companies on May 17, with a full-scale launch planned for June. Prometheum is primarily targeting asset management firms, hedge funds, banks, and registered investment advisers for its services, and it plans to expand to retail clients later this year.
Prometheum gained attention last year when its co-founder and co-CEO, Aaron Kaplan, testified before a United States House Committee, expressing support for regulating crypto under existing securities laws. This aligns with the view of the Securities and Exchange Commission (SEC). In February, Prometheum announced that it would treat Ether as a security when launching its custodial services, which received criticism from the crypto community. However, recent reports indicate that the SEC is urging applicants to expedite their 19b-4 filings, raising hopes for the approval of spot Ether exchange-traded funds (ETFs).
Prometheum was founded in 2017 by brothers Aaron and Benjamin Kaplan. In June 2023, the company obtained a broker-dealer license from the SEC and the Financial Industry Regulatory Authority, which brought it into the spotlight. However, the launch of Prometheum’s Ether custody service may create a conflict between the SEC and the U.S. commodities regulator. The Commodity Futures Trading Commission (CFTC), which categorizes Ether as a commodity, warned in March that such a product would directly contradict U.S. financial market rules. CFTC Chair Rostin Behnam stated that it would put exchanges listing Ether futures contracts in non-compliance with SEC rules.