| A New York-based crypto startup, Prometheum Ember Capital, has become
the first crypto company to obtain a special-purpose broker-dealer
license under the U.S. Securities and Exchange Commission (SEC)
guidelines. The license will allow the firm to custody securities in
the form of digital assets on behalf of its individual and
institutional clients. - The
firm said the license could ultimately pave the way for its parent
company, Prometheum Inc., and subsidiaries to offer crypto trading
services, which is not possible through this license yet.
- The approval was considered a demonstration of the possibility that crypto businesses can be registered with U.S. regulators.
- SEC
Chair Gary Gensler has been famous for his strict regulatory approach
toward crypto assets over the years and has reiterated his belief that
all crypto assets other than Bitcoin (BTC) are securities several
times.
- Gensler
has also repeatedly stated that existing rules are clear, and firms
offering digital asset services to U.S. customers must come and
register.
- Aaron Kaplan, co-CEO
of Prometheum Inc., has pointed out that they would adopt the same
approach as Gensler and offer custody service for the majority of
digital assets, except for Bitcoin.
- Prometheum
has yet to specify the tokens it will support, though it will depend on
the firm's internal determination of whether a digital asset is a security.
- Over
the last several months, many crypto exchanges, including Coinbase,
Kraken, Bittrex, and Binance, came under increased scrutiny by the SEC
over the claims that they violate securities laws through their
services.
- In
2020, the SEC published a policy statement under the leadership of its
former chair, Jay Clayton, urging crypto-related firms to register as
special-purpose broker-dealers.
- Reviews
and approvals for the applications of these licenses are conducted by
the Financial Industry Regulatory Authority (FINRA).
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