US Lawmakers Urge SEC to Confront Prometheum’s Custody Plans for ETH

United States House Financial Services Committee and House Agriculture Committee members have expressed notable concerns regarding the Securities and Exchange Commission’s (SEC) approach to managing Ethereum (ETH).

The focus of their apprehension centers on crypto firm Prometheum’s plans to offer institutional custody services for ETH, which has sparked several demands for clarity and action from regulatory authorities.

Regulatory Ambiguity

In a letter addressed to SEC Chair Gary Gensler dated March 26, prominent lawmakers, including House Financial Services Committee Chair Patrick McHenry and Vice Chair French Hill, urged the Commission to confront Prometheum’s intentions to provide custody services for ETH through its subsidiary, Prometheum Capital.

They warned that such actions could have serious and potentially irreversible implications for the digital asset markets. The lawmakers’ concerns revolve around the ambiguity surrounding the SEC’s stance on Special Purpose Broker-Dealers (SPBD) and their ability to custody non-security digital assets like ETH.

Despite previous assertions by the SEC and the Commodity Futures Trading Commission (CFTC) recognizing ETH as a non-security digital asset, questions linger regarding the regulatory classification and allowed activities within the existing framework.

#NEW: Republicans on the House Financial Services Committee and @HouseAgGOP sent a letter to @SECGov Chair Gensler urging his agency to clarify its position with respect to SPBD Prometheum’s custody of #ETH.

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