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Republicans in the House of Representatives demand that the SEC clarify its position on Prometheum

The initiative stems from a desire to understand the SEC’s decision and approach toward the Prometheum project and why the agency may take certain actions.

Date: 2024-03-27 Author: Marek Stiller
Republicans in the House of Representatives demand that the SEC clarify its position on Prometheum

Republicans from the House of Representatives have written a letter to the US Securities and Exchange Commission (SEC), calling for clarification on Prometheum and whether Ethereum is considered a security.

U.S.-based cryptocurrency platform Prometheum had planned to begin custody of ETH, but those plans are now in limbo as speculation emerges that the SEC plans to classify ETH, the native cryptocurrency of the Ethereum network, as a commodity.

It has been widely reported that a number of US-based companies have received subpoenas attempting to label ETH as a security. Depending on how the SEC labels ETH, this could make the cryptocurrency illegal, putting regulated companies in a difficult position.

“In particular, we are concerned about the lack of transparency in the Securities and Exchange Commission’s (SEC) SPBD [special purpose broker-dealer] system and the SEC’s lack of response to Prometheum’s intention to hold assets that the SEC and the Commodity Futures Trading Commission (CFTC) have deemed to be digital assets other than securities. We call for clarification of the SEC’s position regarding the SPBD’s ability to hold non-securities, its willingness to address issues of non-compliance with the SPBD, the regulatory classification of ETH, and its position regarding Prometheum’s announcement.” – reads the House of Representatives’ letter to the SEC.

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Many in the crypto space say it is unlikely that the SEC will recognize ETH as a security due to the regulator’s approval of trading ETH futures on regulated exchanges in 2023.

Kenzi Wang, co-founder and general partner at Symbolic Capital, told Cryptonews in a recent interview that it is highly unlikely that the SEC will classify Ethereum as a security. Wang explains that the SEC’s classification of ETH as a security would not only overrule long-standing precedents , but would also directly contradict the findings of its partner regulator, the Commodity Futures Trading Commission (CFTC).

“While the SEC continues to make vague statements about the potential security status of ETH, the CFTC has made it clear that it views ETH as a commodity – something that was most clear in documents filed in 2022 in connection with the FTX/Alameda investigation,” Wang said.

Ethereum is seen as a decentralized cryptocurrency rather than a security. Regulatory agencies such as the SEC continue to monitor the cryptocurrency space and may provide further guidance and sudden changes or new rulings in the future. It is important to stay abreast of regulatory changes.

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Marek Stiller
Marek Stiller
Founder of the "Cryptocurrency for Beginners" channel on YouTube. He collaborates with Łukasz to form the Arena Trading group, while at the same time being passionate about blockchain technology. His knowledge and experience in the cryptocurrency industry help beginner investors better understand this dynamic market.
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