In the US, several Republican lawmakers from the House of Financial Services Committee are questioning the US SEC’s silence over the functioning of Prometheum’s Ethereum custody services while labeling ETH as a “crypto asset security.” In a letter to SEC Chair Gary Gensler and FINRA President Robert Cook, GOP lawmakers blasted the securities regulator over the lack of clarity about this classification.
They pointed out that the SEC previously stated Ethereum is not a security while approving the spot Ethereum ETF in July. However, Prometheum has publicly stated that “ETH is a security” and intends to offer custodial services to retail investors. The lawmakers seek clarification on the functioning of special purpose broker-dealers (SPBDs) like Prometheum and question how the SEC and FINRA allow the custodial service provider to operate when they see ETH as a non-security.
This situation highlights the SEC’s unclear stance on crypto asset securities and how they allowed Prometheum as a company to navigate through oversight gaps. The GOP lawmakers expressed concern that players in the digital assets space deserve certainty from their regulators, but under Chair Gensler, they have only received chaos and confusion.
They urged the regulator to deliver real guidance. Gary Gensler reaffirmed his stand on crypto regulation amid his resignation calls and emphasized the necessity of stricter oversight to protect investors. Although it is unclear who will replace him as the next SEC Chair, it is becoming more likely that Gensler will step down from his position instead of continuing until his term ends in 2026.
Sources close to the transition team claim the new SEC chair will be pro-crypto, but the Trump administration is willing to give the responsibility of handling crypto regulations to the Commodity Futures Trading Commission (CFTC).
