GOP Questions US SEC for Prometheum Ethereum Custody

GOP members led by Representative John Rose have expressed concerns regarding the SEC's and FINRA's silence about Prometheum's Ethereum custody services launch.

Several Republican lawmakers from the House of Financial Services Committee are questioning the US Securities and Exchange Commission (SEC)’s silence over the functioning of Prometheum’s Ethereum (CRYPTO: ETH) custody services while labeling ETH as a “crypto asset security.”

In a recent move, representative John Rose penned a letter to SEC Chair Gary Gensler and FINRA President Robert Cook, slamming the securities regulator over the lack of clarity surrounding this classification.

GOP Questions US SEC for Prometheum Ethereum Custody

GOP members led by Representative John Rose have expressed concerns regarding the SEC’s and FINRA’s silence about Prometheum’s Ethereum custody services launch.

Addressing SEC Chair Gary Gensler and FINRA President Robert Cook in the letter, the Republican lawmakers challenged the lack of clarity over Ethereum’s security status.

They said that earlier this year, the US SEC has acknowledged that Ethereum (ETH) is not a security while approving the spot Ethereum ETF in July. Moreover, in a legal scuffle with Binance, the securities regulator clarified that the term “crypto asset securities” doesn’t apply to digital assets themselves, but instead to the way of selling those assets to retail investors.

However, the GOP lawmakers stated that Prometheum has publicly stated that “ETH is a security” and it intends to offer custodial services to retail investors. The lawmakers seek clarification on the functioning of the special purpose broker-dealer (SPBD) like Prometheum.

Besides, the also a question of how the SEC and FINRA allow the custodial service provider to operate when they see ETH as a non-security. In the letter to the top leaders of the SEC and FINRA, the GOP leaders asked:

“As SEC Chair Gary Gensler acknowledged during his testimony before the Committee, SPBDs “are not allowed to custody non-securities,” yet that is precisely what Prometheum has done when it soft-launched its custodial services for ETH.”

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