Prometheum, a crypto company, has recently drawn a lot of attention due to its approach to dealing with regulators and licensing bodies.
Special License
In May 2023, Prometheum became the first company to snag a special-purpose broker-dealer license from the SEC and FINRA. This license allows them to custody digital assets, something major players like Coinbase and Robinhood have been trying (and failing) to get for years. The community didn’t take this news well. The Blockchain Association called it a 'sweetheart deal,' while some Republican leaders in Congress called for a DOJ investigation to figure out how Prometheum managed to pull this off.
Token Classification
Prometheum didn’t stop at getting a controversial license. They decided to classify some of the biggest tokens in the market—Ethereum (ETH), Uniswap’s UNI, and Arbitrum’s ARB—as securities on their platform. This caused an uproar. Why? Because the SEC itself hasn’t even made it clear if Ethereum is a security or not. Critics asked, 'How can Prometheum call these tokens securities when the SEC hasn’t even made up its mind?'
Ongoing Questions
In May, Prometheum launched its Ethereum custody services, a move that defied the industry’s consensus. Most believe the current laws don’t adequately cover digital assets, but Prometheum didn’t seem to care. The company stated: 'We will take appropriate action if regulators later decide that something we’ve listed isn’t a security.' Since CEO Aaron Kaplan testified before Congress, questions have only multiplied about the company’s early financial backers and profitability. In their January SEC filings, Prometheum admitted to 'significant losses' and said they hadn't even started generating revenue.
Prometheum continues to raise questions and stir controversies in the crypto community with its unconventional approach to licensing and token classification. The company's future remains uncertain.
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