Prometheum’s affiliate, the Financial Industry Regulatory Authority (FINRA), has approved Prometheum Ember Capital as a special purpose broker-dealer (SPBD) for digital asset securities.
This authorization authorizes Prometheum to hold digital asset securities for retail and institutional clients.
Prometheum Ember Capital is a qualified custodian subject to the provisions of the United States Exchange Act of 1934 due to its designation as an SPBD by FINRA.
It is the first company to offer qualified custody of digital assets. FINRA is the U.S. securities industry’s self-regulatory body. Other providers of digital asset custody hold state licenses.
Aaron Kaplan, co-chief executive officer of Prometheum, said in a statement:
“Digital asset investors in the U.S. are currently custodying cryptocurrencies that are securities through platforms that don’t offer the same SEA 15c3-3 [Rule] customer protections required by the federal securities laws.”
Prometheum Ember Capital will offer custody services to institutional and retail clients. Individual investors can sign up for a waiting list on the company’s website.
Recently, the U.S. Securities and Exchange Commission (SEC) has scrutinized traditional investment firms and crypto firms offering digital asset custody.
New SEC regulations could require crypto firms to transfer their assets to a separate entity.
The regulator’s proposals have been controversial within the cryptocurrency community and among lawmakers.
Another Prometheum subsidiary, Prometheum ATS, is FINRA-registered to provide alternative trading services, including trading, clearing, settlement, and custody of digital asset securities.
This service, introduced in October, is intended to integrate the regulated trading of digital assets with legacy trading systems.
For this service, Prometheum partnered with Anchorage Digital Bank. Similarly, it was designed for institutional and retail investors.