The recent development involves US Republicans drafting a letter to SEC Chairman Gary Gensler, led by Chairman Patrick McHenry of the House Financial Services Committee and the House Agriculture Committee. The lawmakers seek clarification on various topics, including the ability of the Special Purpose Broker Dealer (SPBD) to store non-security digital assets, the SEC's actions against non-compliance by SPBDs, the regulatory classification of ETH, and the SEC's response to Prometheum's announcement.

The letter emphasizes that there is ample evidence supporting ETH as a non-security digital asset. However, concerns arise as an SPBD intends to provide custody services for ETH under existing regulations that do not permit such activities. This move could potentially have significant negative effects on the digital asset markets.

Additionally, the letter criticizes the SEC for frequently categorizing most cryptocurrencies as securities, leading to confusion due to the absence of a clear definition of securities for crypto. The lack of clear asset classification rules or comprehensive guidance from the SEC has heightened uncertainty within the digital asset ecosystem. Despite previous acknowledgments of ETH as a non-security digital asset, the SEC has been reluctant to affirmatively declare ETH as a non-security. This ongoing ambiguity surrounding ETH's classification has added to the confusion and uncertainty for market participants.

The SEC's failure to determine which digital assets qualify as digital asset securities has further added to the confusion for entities under SEC oversight.