Prometheum becomes first U.S. regulator to become a custodian for digital asset securities

First SEC Registered Broker-Dealer

Prometheum Ember Capital announced today that it has been the first in the industry to receive approval from the Financial Industry Regulatory Authority (FINRA) as a Special Purpose Broker-Dealer (SPBD) for digital asset securities.

The approval will allow Prometheum, as a regulated custodian, to provide custodial services for digital asset securities to individual and institutional investors.

Prometheum Ember Capital has made history as the 1st SEC-registered broker-dealer and FINRA member firm approved to operate as a Special Purpose Broker-Dealer (SPBD) for digital asset securities. Learn about how we continue to move the industry forward: https: //t.co/owwoQbQ4Zd pic.twitter.com/kCySyPg9Qe

— Prometheum (@PrometheumInc) May 23, 2023

Prior to this approval, Prometheum received approval from FINRA last October to operate an Alternative Trading System (ATS) for digital asset securities, providing digital asset securities trading services for individual and institutional investors. Until this SPBD approval, the company has partnered with the federally licensed Anchorage Digital Bank to provide clearing, settlement and custody functions.

Upon its approval as an ATS, Aaron Kaplan, founder and co-CEO of Prometheum, said: “By ensuring the multiple layers of protection and standards required on Wall Street and maintaining our ability to comply with current securities laws, We are trying to differentiate ourselves from other companies,” he said.

With SPBD’s license, Prometheum is subject to the customer protection rules required by federal securities laws. Kaplan pointed out that U.S. digital asset investors are currently depositing crypto assets (virtual currencies), which are securities, on platforms that do not offer this customer protection rule. He argued that “exchanges and trading platforms that operate solely under state licenses” are out of compliance, and warned that they could pose serious risks to customers.

He argued that there is a way for the crypto industry to move forward in a compliant manner in the United States. Said Prometheum proves it.

Prometheum is a company founded in 2017 by a group of Wall Street lawyers to create an end-to-end ecosystem for trading, custody and settlement of digital asset securities in compliance with US federal government regulations.

OTC Markets Group

OTC Markets Group is another company that has been approved by FINRA to be licensed to trade digital asset securities. OTC Markets announced in its earnings report on the 9th that it received approval on the 5th.

OTC Markets, a well-established company in securities trading such as Penny Stock, offers trading services for digital asset securities on Alternative Trading Systems (ATS). Deputy General Counsel Cass Sanford said of the company, “Instead of resisting these regulations, we’re looking for a company that actually tries under the rules that the SEC has issued to date. It is.”

Sanford said that if cryptocurrencies were securities, they would be considered over-the-counter securities. However, he noted that token issuers will need to make proper disclosures before trading on ATS is supported.

The company provides a trading platform for small and medium-sized banks, public securities of international companies, and cryptocurrency-related funds of Grayscale.

SEC decision

SEC Chairman Gary Gensler has argued that most cryptocurrencies are likely to be securities, but the SEC has yet to provide a clear classification.

When the SEC filed a lawsuit against a cryptocurrency company, the securitization of the corresponding token was pointed out.

The approach of Prometheum and OTC Markets, which treats digital assets (virtual currencies) as securities and builds trading services, may be one of the pragmatic ways to deal with opaque SEC regulations.

connection:Coinbase submits court documents to SEC

The post Prometheum becomes first U.S. regulator to become a custodian for digital asset securities appeared first on Our Bitcoin News.