House Republicans Urge SEC Clarity on Prometheum’s ETH Custody Plans

House Republicans have penned a letter to the U.S. Securities and Exchange Commission (SEC) seeking clarity on Prometheum’s intention to offer custody services for Ethereum’s token, Ether (ETH). Amid speculation that the SEC may classify ETH as a security, the letter highlights concerns regarding the lack of transparency in the SEC’s Special Purpose Broker-Dealer (SPBD) regime and its implications for non-security digital assets like ETH.

The letter underscores the need for the SEC to address Prometheum’s custody plans and provide clarity on SPBDs’ ability to custody non-securities, as well as the regulatory classification of ETH. While some in the crypto community speculate about the possibility of ETH being deemed a security, industry experts argue that such a classification is highly unlikely. The approval of ETH futures trading on regulated exchanges by the SEC in 2023 suggests a recognition of Ethereum as a commodity rather than a security.

Despite ongoing regulatory scrutiny, Ethereum is widely regarded as a decentralized cryptocurrency. However, regulatory agencies like the SEC continue to monitor the crypto space closely, and further guidance or changes in rulings may occur in the future. It remains essential for stakeholders to stay informed about regulatory developments and adapt to any potential shifts in the regulatory landscape.