Overlay Logo

SEC & FINRA Finally Approve a Crypto Company

Casey Muller
Casey Muller
Director of Legal & Internal Compliance

Prometheum Ember Capital has become the first crypto company to register with the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) as a special-purpose broker-dealer. This approval allows Prometheum to operate as a qualified custodian of digital asset securities on behalf of retail and institutional clients.

Other digital asset custody providers typically operate with state licenses, which, as highlighted by Prometheum’s co-CEO, Adam Kaplan, “[doesn’t] offer the same SEA 15c3-3 [Rule] customer protections required by the federal securities laws.”

Prometheum’s approval came with some important restrictions. First, they can only offer digital assets that are deemed securities. This excludes Bitcoin, which is the most widely-known crypto coin. Second, Prometheum cannot offer trading or exchange services as their license doesn’t allow for transactions via clearing and settling. 

Regardless of the limitations, Kaplan believes that becoming an “SEC-registered broker-dealer will provide the regulatory protections needed to re-establish investor confidence, increase institutional adoption, and allow the (crypto) industry to flourish.”

Coin Telegraph
More from the blog