Prometheum Ember Capital (PMC), a New York-based company, has made history by securing regulatory approval to become the first crypto-focused firm to register with the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) as a special-purpose broker-dealer. The approval allows PMC to operate as a “qualified custodian” for digital assets.
Prometheum Inc., the parent company of PMC, announced the groundbreaking development on May 23, highlighting a significant milestone for the cryptocurrency industry, or the start of a dark age.
Founded in 2017, Prometheum is a blockchain-focused company that aims to create a comprehensive ecosystem for the trading, custody, and settlement of digital asset securities. Prometheum Inc. and its subsidiaries are at the forefront of building a safer and more responsible industry for digital assets.
Prometheum approval comes with limitations
Meanwhile, Prometheum Ember Capital is subject to the provisions of the “Securities and Exchange Act (“SEA”) 15c3-3 Customer Protection Rule.” This allows Prometheum to custody digital asset securities on behalf of both retail and institutional clients. The approval was granted by FINRA, the self-regulatory body overseeing the U.S. securities industry.
However, it’s important to note that PMC’s license does not cover Bitcoin (BTC) due to the limitations of the current approval. While PMC has not disclosed the specific assets it will support, it plans to conduct an internal assessment to determine which cryptocurrencies can be deemed digital securities.
Additionally, the license does not permit PMC to process crypto transactions via clearing and settling, which means it cannot provide trading or exchange services at this time.
Despite these limitations, Prometheum remains optimistic about securing future approvals. The company intends to pair its subsidiaries to offer a comprehensive suite of crypto services, including trading, once the necessary regulatory clearance is obtained.
The track to regulatory clarity
This approval represents a notable departure from the SEC’s historical disapproval of crypto companies and their proposals. The digital asset industry has often faced challenges due to the ambiguous regulatory landscape and federal regulators’ harsh approach to the sector.
However, Prometheum’s registration as a qualified custodian indicates a potential path to regulatory clarity for companies dealing with digital assets classified as securities, but it also implies that this clarity was achieved by faking the nature of digital assets and disguising them as securities.
The recognition of Prometheum as a qualified custodian further sets a precedent for future entrants and underscores the SEC’s acknowledgment of the crypto sector’s unquestionable significance.