The landscape of the US crypto industry may be shifting as a Securities and Exchange Commission (SEC) backed watchdog is granting significant approvals for companies working in compliance with securities regulations. The Financial Industry Regulatory Authority (FINRA) approved its first broker-dealer with custody rights for digital assets securities, Prometheum Ember Capital LLC, and authorized OTC Markets Group to join a select group of firms legally providing crypto securities trading.
Prometheum Capital, a crypto firm built intending to comply with SEC regulations, received the broker-dealer approval. Founder and co-CEO of parent company Prometheum Inc., Aaron Kaplan, believes that the firm will challenge industry claims of the lack of a clear US compliance path. He said, “There is obviously a way forward for crypto in the United States.”
Many in the crypto industry argue that the SEC’s insistence on conforming to long-standing securities laws for registering exchanges, brokerages, and assets is untenable. For example, US crypto platform Coinbase is expecting an enforcement action, and has taken the agency to court over its refusal to provide crypto-specific rules or guidance.
Meanwhile, Prometheum Capital’s platform will go live in the third quarter, with its approval as a special purpose broker-dealer effective from May 17. However, questions remain about which assets can be traded on the emerging legal trading platforms. According to SEC Chair Gary Gensler, the majority of crypto assets are unregistered securities, violating securities laws, with the notable exception being Bitcoin.
Prometheum Capital’s Kaplan contends that his platform will be able to trade many digital assets that have sought exemptions from certain securities. Cass Sanford, deputy general counsel at OTC Markets, believes that a token’s backers must make proper public disclosures before trading on their ATS.
As legacy crypto platforms face increasing pressure from US regulators, some are suggesting that they may soon become obsolete due to non-compliance with securities laws. Kaplan opines that investors are looking for platforms that afford them the proper protections, and Prometheum’s services are likely to attract both institutional and retail investors due to their “hyper-competitive” pricing.
Source: Coindesk
