Prometheum Launches Ether Storage Service That Treats ETH As Security: Report

Digital asset trading and custody firm Promet has reportedly soft-launched its controversial Ether (ETH) custody service, which treats digital assets as security.

According to a May 20 Fortune report, the security solution was rolled out to select companies on May 17, with full scale expected to take place in June.

Prometheum targets its services at asset management firms, hedge funds, banks and registered investment advisors, and aims to expand to retail clients by 2024.

Prometheum was brought into the spotlight in June last year after founder and co-founder Aaron Kaplan testified before a US House committee. Commission.

In February, Prometheus suggested that it would consider Ether a security when it launched a holding service on its platform later in the year – drawing criticism from the crypto community.

Aaron Kaplan, one of the company's chief executives, said it “eliminates a lot of arguments that they can't be made under existing laws.”

“It's the first time…an investment contract digital asset security is being captured and treated under securities laws.”

Some initially viewed the SEC's nod to promethium and ether's handling of spot ether ETFs as a bad sign.

However, since then the SEC has been asking filers to expedite their 19b-4 filings, raising hopes again.

Bloomberg ETF analysts Eric Balchunas and James Seifert raised their estimates for the Ether ETF from 25 percent to 75 percent.

Related: If SEC Approves Spot Ether ETFs, Many Will ‘Hold Firmly Out of Bad'

Brothers Aaron and Benjamin Kaplan founded Promethium in 2017, which will remain relatively unknown until June 2023, when it will receive a broker-dealer license from the SEC and the Financial Industry Regulatory Authority.

However, the launch of Promethium Ethereum's custody service may now cause friction between the SEC and the US commodity regulator.

The Commodity Futures Trading Commission, which classifies ether as a commodity, warned in March that such a product would be in direct conflict with US financial market rules.

“It then puts our registrants, our exchanges that list Ether as a futures contract, in a manner that does not comply with the SEC's rules as opposed to the CFTC's rules,” CFTC Chairman Rustin Behnam said at the time.

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