Digital asset firm Prometheum sets sights on offering ether custodial services

Prometheum Capital LLC, a subsidiary of the digital asset firm Prometheum, Inc., is moving forward with providing crypto custodial services after picking ether as its first offering. 

Institutional clients such as asset management firms, hedge funds, banks and registered investment advisors may sign up for Prometheum Capital's custodial services, which are set to launch in the year's first financial quarter, according to an official company release. The firm intends to expand services to retail clients as well as institutional ones in 2024. 

"Prometheum is pleased to announce the launch of Prometheum Capital’s custodial services, initially focusing on ETH. These services have been purposely designed to align with the rigorous regulatory and compliance mandates outlined by federal security laws," said Prometheum, Inc. Co-CEO Aaron Kaplan said. "Through this initiative, we aim to provide investors with a pathway for engaging with digital assets within the framework of established regulatory guidelines."

Prometheum's ether custodial services offering comes after the Financial Industry Regulatory Authority allowed the firm to provide crypto clearing and settlement services via a special purpose broker dealer license on Dec. 21, The Block previously reported. The Securities and Exchange Commission gave Prometheum that license in May 2023.

An interesting pick 

SEC Chair Gary Gensler has hinted that ether could be a security, while Commodity Futures Trading Commission Chair Rostin Behnam has said it would be a commodity, causing some confusion in the industry. Prometheum's foray into Ether could force the SEC to make a decision, Fortune reported on Wednesday. 

Prometheum's steps forward come as the SEC has consistently warned that crypto exchanges need to register with the agency. Over the past year, it's charged Coinbase, Binance and Kraken for allegedly operating as an unregistered exchange, broker, dealer and clearinghouse. Meanwhile, crypto firms have argued that it's not possible to register with the agency. 

After obtaining its license from the SEC over the past year, Prometheum quickly drew the ire of Republican lawmakers and others in the crypto industry. 

When asked in December what message Kaplan has to those who say it's not possible to register with the SEC, he said working with the law instead of against it helps. 

"By keeping your head down and working within the regulation and trying to work within the law as opposed to change the law, one can achieve success when properly registering under the securities law as evidenced by first the approval for the special purpose broker dealer and now the approval to clear and settle."