Here is Possible Factor That Could Lead SEC to Classify Ethereum as Security

While the SEC has not taken a stand about Ethereum’s legal status, Prometheum has announced plans to provide custody for ETH as a digital asset security.

Per a recent report from Fortune Crypto, the SEC could be forced to label Ethereum (ETH) a security. This comes after Prometheum, a U.S.-registered securities platform, announced the launch of a custodial service for the second-largest cryptocurrency by market cap, Ethereum.

According to the report, Prometheum’s launch of a custodial solution for Ethereum could be a larger strategy by the firm to get regulators to consider ETH to be a security.

Prometheum’s Controversial Offering

For context, Prometheum suggested yesterday that ETH will be treated as digital security on its custodial services platform.

The firm, which received approval from the U.S. Financial Industry Regulatory Authority (FINRA) in May 2023, said it would provide custodial service for other tokens before launching its trading operations in Q2 2024.

Commenting on the development, Prometheum’s co-CEO, Aaron Kaplan, said: 

“Prometheum Capital’s custodial services, starting with ETH, are tailored to meet the stringent regulatory and compliance standards promulgated by the Federal Security Laws.”

– Advertisement –

He emphasized that the milestone launch of the custodial solution is driven by its unwavering commitment to compliance and investors’ protection.

SEC Indecisive About Ethereum Legal Status

Despite labeling over 60 crypto assets as securities, including XRP and SOL, the SEC has avoided taking a legal position on ETH. Bitcoin (BTC), according to SEC Chair Gary Gensler, is the only crypto asset believed to be outside the regulator’s purview.

However, Gensler has yet to take any stand on Ethereum’s legal status, even when asked during a Congressional hearing in April 2023 whether ETH qualified as a security.

It is unclear how the SEC will respond to the Prometheum’s plans of offering ETH as digital security in its custody platform.

Citing legal experts familiar with the matter, Fortune noted that with Prometheum launching a custodial service for ETH, the regulator could be forced to add Ethereum to the list of crypto assets deemed as securities.

No Decision on Ethereum Spot ETFs

In the meantime, top asset managers, including BlackRock, Fidelity Investments, and ARK 21 Shares, are seeking to launch spot-based ETFs for Ethereum.

The SEC has repeatedly postponed its decision to approve or deny the multiple Ethereum spot ETF applications on its desk.

Despite the SEC maintaining silence, top ETF analysts, including Bloomberg’s Eric Balchunas, believe the regulator would approve the launch of at least one Ethereum spot fund by May 23.

• SEO Powered Content & PR Distribution. Get Amplified Today.
• PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
• PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
• PlatoESG. Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
• PlatoHealth. Biotech and Clinical Trials Intelligence. Access Here.
• Source: https://thecryptobasic.com/2024/02/08/here-is-possible-factor-that-could-lead-sec-to-classify-ethereum-as-security/?utm_source=rss&utm_medium=rss&utm_campaign=here-is-possible-factor-that-could-lead-sec-to-classify-ethereum-as-security