Prometheum's Ethereum Custody Service Reignites Discussion around ETH's Legal Classification

By: Isha Das

The alternative trading platform, Prometheum, has recently begun offering custodial services for Ethereum (ETH), the second-largest cryptocurrency by market capitalization. This move has placed the classification of Ethereum according to the Securities and Exchange Commission (SEC), once again under scrutiny.

Prometheum, a New York-based firm, seeks to operate in compliance with existing laws within the crypto industry. The firm previously acquired regulatory backing in 2021 to function as an alternative trading system for securities. Furthermore, it secured a special-purpose broker-dealer license from the Financial Industry Regulatory Authority (FINRA), setting it apart with the ability to work as a broker-dealer in 'digital asset securities'.

Notably, Prometheum's approach to compel SEC to designate Ethereum as a security diverges from the viewpoints of platforms like Coinbase, who argue that current regulations are outdated. As Prometheum introduces its Ethereum custody service, it urges the SEC to decide on Ethereum's legal classification. While Prometheum's compliance-focused approach is yet to prove successful, the firm's moves have certainly reinvigorated the conversation about Ethereum's legal status.

At present, Ethereum is trading at $2,428, indicating a slight 0.5% rise in price over the last 24 hours.