{"id":20932,"date":"2024-05-21T11:00:28","date_gmt":"2024-05-21T08:00:28","guid":{"rendered":"https:\/\/coinengineer.io\/?p=20932"},"modified":"2024-05-21T09:13:45","modified_gmt":"2024-05-21T06:13:45","slug":"prometheum-soft-launches-controversial-ethereum-custody-service","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/prometheum-soft-launches-controversial-ethereum-custody-service\/","title":{"rendered":"Prometheum Soft-Launches Controversial Ethereum Custody Service"},"content":{"rendered":"<p><strong>Prometheum<\/strong>, a digital asset trading and custody firm, soft-launched on May 17 their controversial <strong>Ether (ETH)<\/strong> custody service with a full-scale launch planned for next month. The service, treating digital assets as securities, was first introduced to a few companies, as reported by Fortune on May 20. The complete launch is expected to take place in June.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_71 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/coinengineer.net\/blog\/prometheum-soft-launches-controversial-ethereum-custody-service\/#Targeting_Institutional_Clients_First\" title=\"Targeting Institutional Clients First\">Targeting Institutional Clients First<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/coinengineer.net\/blog\/prometheum-soft-launches-controversial-ethereum-custody-service\/#Potential_Market_Impact_and_Regulatory_Conflicts\" title=\"Potential Market Impact and Regulatory Conflicts\">Potential Market Impact and Regulatory Conflicts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/coinengineer.net\/blog\/prometheum-soft-launches-controversial-ethereum-custody-service\/#Looking_Ahead\" title=\"Looking Ahead\">Looking Ahead<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Targeting_Institutional_Clients_First\"><\/span>Targeting Institutional Clients First<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Prometheum\u2019s new offering targets asset management firms, hedge funds, banks, and registered investment advisors, with plans to extend to retail clients in the second half of 2024. The company was brought to public attention last June when co-founder and co-CEO Aaron Kaplan testified before a U.S. House Committee in favor of the regulation of cryptocurrencies like securities.<\/p>\n<p>In February, Prometheum expressed its plans to consider Ether as a security when it was about to introduce its custodial services, which led to heavy criticism from the crypto community. This step was supported by Aaron Kaplan, who said, <strong>\u201cIt does away with a lot of the arguments that stuff can\u2019t be done under existing law. It is the first time that an investment contract digital asset security is being custodied and treated under the securities laws. \u201d<\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Potential_Market_Impact_and_Regulatory_Conflicts\"><\/span>Potential Market Impact and Regulatory Conflicts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>At first, some saw the SEC\u2019s approval of Prometheum\u2019s treatment of <a href=\"https:\/\/coinengineer.net\/blog\/ethereum-co-founder-vitalik-buterin-responds-to-criticisms\/\">Ether<\/a> as harmful to the likelihood of spot <a href=\"https:\/\/coinengineer.net\/blog\/coinbase-evaluates-markets-attitude-toward-spot-ethereum-etf-approval\/\">Ether ETFs.<\/a> Yet, recent reports indicate that the SEC urges 19b-4 filers to hurry up, which has sparked hopes. Bloomberg ETF analysts Eric Balchunas and James Seyffart have subsequently tripled their predicted chances of an approved spot Ether ETF from 25% to 75%.<\/p>\n<p>Although Prometheum was established by the brothers Aaron and Benjamin Kaplan in 2017, it remained obscure until June 2023 when it acquired a broker-dealer license from both the SEC and the Financial Industry Regulatory Authority. At present, the launch of the company\u2019s Ethereum custody service could cause a schism between the <strong>SEC and the Commodity Futures Trading Commission (CFTC).<\/strong> The CFTC which has classified Ether as a commodity in March, alerted that such product might result in the U.S. financial market rules conflicting.<\/p>\n<p>According to CFTC Chair Rostin Behnam, so it will then put our registrants, our exchanges who list Ether as a futures contract kind of in non-compliance of SEC rules as opposed to CFTC rules.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Looking_Ahead\"><\/span>Looking Ahead<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While Prometheum is ready to go full-scale with the Ether custody service, the financial and regulatory situations are still in flux, and it is impossible to say what the company is up against. The result could have major input on the future of U.S digital asset trading and regulation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Prometheum, a digital asset trading and custody firm, soft-launched on May 17 their controversial Ether (ETH) custody service with a full-scale launch planned for next month. The service, treating digital assets as securities, was first introduced to a few companies, as reported by Fortune on May 20. The complete launch is expected to take place<\/p>\n","protected":false},"author":6,"featured_media":20933,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[105,1000,6250],"class_list":["post-20932","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","tag-ethereum","tag-ethereum-etf","tag-prometheum"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Prometheum Soft-Launches Controversial Ethereum Custody Service - Coin Engineer<\/title>\n<meta name=\"description\" content=\"Prometheum soft-launched its controversial Ether custody service on May 17, targeting a full launch next month. 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