The US Securities and Exchange Commission (SEC) has approved spot Ethereum ETFs after Bitcoin, thus deciding that ETH is not a security.
However, Prometheum Capital continues to provide ETH custody services, claiming that Ethereum is a security.
This situation has also caught the attention of Republican members of the US House of Representatives, who have questioned the SEC and the Financial Industry Regulatory Authority (FINRA) regarding Prometheum Capital’s ETH custody services.
Accordingly, four Republican members of the U.S. House Financial Services Committee, John Rose, French Hill, Dusty Johnson, and William R. Timmons IV, expressed their concerns about Prometheum Capital's continued Ethereum custody services.
At this point, they reminded SEC Chairman Gary Gensler and FINRA Chairman Robert Cook in their letter that the SEC stated that Ethereum is not a security.
However, they emphasized that Prometheum's definition of Ethereum as a security and the launch of custody services for Ethereum in May created a confusing situation.
Prometheum should not offer services for Ethereum, which is not classified as a security by the SEC, the representatives said:
“FINRA is an agency that only approves securities custody services, and Prometheum is approved as a special purpose brokerage firm (SPBD) only for securities custody services.
On the other hand, the SEC has also stated that ETH is not a security.
Given all this, it is difficult to understand how Prometheum can provide custody of Ethereum as a security in compliance with SEC and FINRA rules, and why the SEC and FINRA continue to allow Prometheum to offer ETH as a security to the public.”
Representatives stated that Prometheum's Ethereum statements and actions were surprising and caused confusion in the market.
The representatives stated that the silence of the SEC and FINRA on this issue further complicates the situation for ETH and the market and increases uncertainty, and creates potential risks for the market and consumers.
*This is not investment advice.