• 30 May, 2024

The First Crypto Regulated Firm Prometheum Delays the Launch of Crypto Custody

The full-service market ecosystem for digital asset securities Prometheum, has earlier announced that it would launch a custody platform by Q1 2024, but the firm laggs behind its goals. The co-CEO of Prometheum Benjamin Kaplan stated that the team is trying to complete the technology related to its wallet system.

Prometheum is a member of Financial Industry Regulatory Authority (FINRA) and has received a Special Purpose Broker-Dealer (SPBD) to custody digital asset securities. The firm planned to expand its business by including services for trading, clearing, settlement, and custody, by partnering with Anchorage Digital Bank for its affiliate, Prometheum Ember ATS.

Prometheum ATS could serve as an alternative trading platform where institutional investors can purchase and sell digital asset securities. The Prometheum ATS trading system is built to offer customers a web-based front end and an order management system.

It has been over five weeks since the firm said that it would launch the custody platform. In order to comply with the regulation, the company is still reviewing its smart contracts. co-CEO Benjamin Kaplan stated,

We expect completion soon and will move towards the launch of our custodial services for institutional clients imminently thereafter.

With the help of the leading auditing firm, the Prometheum team is in the process of reviewing the smart contracts. The company seeks to offer custody services for ether, the second-largest token by market share. When questioned about other tokens the company might support, the spokesman mentioned that they currently have no additional asset names to disclose.

Though the federal securities laws required a high standards to comply with Promethum’s CEO was in the side of SEC. He highlighted that Gendler and his agency is right though many insiders and Republican lawmakers accused for the stance. Yet still many contradictory views loom regarding the current regulatory framework. Recently, the Chairman of Financial Services Committee stated,

Banks would be required to take on significant capital, liquidity, and other costs under the existing prudential regulatory framework. This essentially makes it cost prohibitive for financial institutions to custody their customers’ digital assets.

If Prometheum is right, this might be a real-time example of Gensler’s argument that cryptocurrencies should be governed by current SEC regulations and U.S. securities legislation as securities. The executives of Prometheum claim that their goal is to create a one-stop shop where institutional and individual investors will eventually be able to store their digital tokens, trade them on an alternative trading system (ATS), and transact with tokenized assets.

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