Prometheum Adds Uniswap (UNI) and Arbitrum (ARB) to Its Custodial Platform, Classifying Them as 'Digital Asset Securities”

Prometheum, a digital asset trading and custody firm, has announced the addition of Uniswap (UNI) and Arbitrum (ARB) to its custodial platform.

Digital asset trading and custody firm Prometheum has announced the addition of Uniswap (UNI) and Arbitrum (ARB) to its custodial platform. These tokens will be combined with Ether (ETH) in what Prometheum calls “digital asset securities.” The custodial services of these assets will be offered by the third quarter of the year.

“We’re excited to announce the addition of the following #digitalassetsecurities, Uniswap (UNI) and Arbitrum (ARB), to the Prometheum Capital custodial platform,” Prometheum announced on Monday.

“Institutional and corporate clients will be able to custody Uniswap (UNI), Arbitrum (Arb) and Ethereum's Ether (ETH) on Prometheum's SEC- and FINRA-registered platform by the third quarter of 2024.”

Prometheum's decision to classify UNI and ARB as securities has raised eyebrows within the crypto community. This is in line with the firm’s earlier position on Ether, which it also treats as a security. The categorization of such decentralized assets as securities might pose considerable consequences, particularly in the context of current and future regulation.

Uniswap, a decentralized cryptocurrency exchange, has previously claimed that UNI is not a security. In response to the SEC’s Wells notice in April, Uniswap stated that UNI is as decentralized as Bitcoin (BTC) and Ether, which are not traditional securities.

Arbitrum, a decentralized autonomous organization (DAO), is also under the spotlight, especially after ARB token holders voted for the ARB staking on August 15.

Prometheum's Expanding Custodial ServicesPrometheum, through its Prometheum Capital unit, is aiming to become an industry giant in the digital asset custody market. Prometheum Capital is a Special Purpose Broker-Dealer (SPBD) that is current with the United States Securities and Exchange Commission (SEC) and is a FINRA-registered firm.

The company's proposition as the “only SEC-qualified custodian and special purpose broker-dealer for digital asset securities” provides it with a competitive edge over other industry participants. Initially, the company aimed to begin offering custody services in the first quarter of 2024, but this has been shifted to the third quarter.

Prometheum's future plans include expanding its digital asset portfolio to debt, equities, ETFs, mutual funds, options, MMFs and other investment contracts that are issued and transferred on the blockchain.

SEC, CFTC Clash Over Token ClassificationSome critics have questioned Prometheum's earlier decision to custody ETH, especially with the backdrop of the CFTC ruling that ETH is a commodity. CFTC Chairman Rostin Behnam has also highlighted the potential conflict, saying that a securities firm that is holding ETH may be in violation of the agency’s rules.

The SEC has also indicated that UNI could be a security, and there may be legal consequences. Uniswap Labs, the company behind UNI, has attempted to dismiss this narrative, saying that the SEC's legal reasoning is weak and has been dismissed by courts.

“The SEC's aggressive theories are an effort to expand its jurisdiction beyond exchanges to communications technology – and beyond securities to all markets,” Uniswap Labs stated in a May blog post.

Following the announcement, both UNI and ARB tokens saw a positive market reaction, with UNI up 10% and ARB rising by 1% in the past 24 hours.

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