Prometheum becomes first crypto company to be approved by SEC, FINRA as special-purpose broker-dealer

New York-based Promethium Ember Capital (PMC) has won regulatory approval to become the first cryptocurrency-focused company registered with the US SEC and FINRA as a special purpose broker-dealer.

Prometheum Inc. — Parent company of PMC — announced The development took place on May 23rd and was announced as allowing PMC to act as a “qualified custodian” of digital assets. However, due to licensing restrictions, the company does not offer Bitcoin (BTC) services.

Aaron Kaplan, co-CEO of Promethium, said:

“Keeping our assets in SEC-registered broker-dealers provides the regulatory protections we need to restore investor confidence, increase institutional adoption, and enable the industry to thrive. I expect.”

No Bitcoin, No Transactions

This authorization allows PMC to store digital assets that can be considered securities. This currently excludes Bitcoin (BTC) and includes virtually all other cryptocurrencies.

PMC did not disclose the list of assets it supports, but said it will internally evaluate which cryptocurrencies qualify as digital securities.

In addition, the license does not permit the company to process cryptocurrency transactions through clearing or settlement, so PMC cannot provide trading or exchange services.

However, according to Bloomberg, Promethium said it is confident it will obtain the necessary approvals in the future and that it intends to partner with its subsidiary to offer a range of crypto services, including trading, once that happens. , reported Bloomberg. report.

Road to regulatory clarity?

The successful registration of Prometheus with the SEC is an outlier in the sea of ​​disapproval that regulators have thrown at cryptocurrency companies and their various plans in recent years.

Many U.S. exchanges and cryptocurrency companies operate under state licenses due to the uncertain regulatory landscape and the concern of federal regulators in this area.

The SEC recently said that it believes the crypto industry is mostly securities, and that the current framework is sufficient to address it, so no new rules are needed. Meanwhile, regulators have also acknowledged in the past that Bitcoin is not a security.

PMC’s license echoes that sentiment by excluding Bitcoin and allowing other “digital asset securities.”

Katten Senior Counsel and CFTC Enforcement Counsel Gary Dewar said: bloomberg news The approval indicates that there is a “pathway” to future clarification in this area and further approvals for companies wishing to handle digital assets, which are securities under similar licenses.

But final regulatory clarity can only be achieved by properly defining what can and cannot be considered a security, he added.