The House Committee is investigating the SEC's oversight of Prometheum's Ethereum custody initiative, seeking clarity on Special Purpose Broker-Dealers (SPBDs) and the regulatory landscape for digital assets.

Members of the House Financial Services Committee, led by Chairman Patrick McHenry and Subcommittees Chairmen French Hill and Bill Huizenga, are raising concerns about the regulatory ambiguity surrounding Prometheum's recent foray into offering custody services for Ethereum's native token, Ether (ETH).

Following Prometheum's soft launch of an Ethereum custody service, categorized as a security under existing federal regulations, questions have arisen within the industry regarding the validity of this classification. The Committee is seeking answers from the SEC regarding the permissible activities for entities like Prometheum operating as Special Purpose Broker-Dealers (SPBDs).

In light of these developments, the House Financial Services Committee has reiterated its request for clarification from the SEC, emphasizing the need for guidance on whether SPBDs are authorized to custody digital assets like ETH in the absence of specific regulations governing such activities.

The Committee's persistence stems from the SEC's previous inadequate responses to inquiries made on March 26, prompting a renewed push for clarity on the regulatory framework governing Prometheum's custody plans and their potential impact on the digital asset markets.

Prometheum, co-founded by Aaron Kaplan, has taken a pioneering stance by including Ethereum as a registered security in its custody offerings, targeting asset managers, crypto hedge funds, and financial institutions. This strategic move has garnered support from regulatory bodies like FINRA and the SEC, setting a precedent in the evolving digital currency landscape.

As the SEC evaluates proposals for spot Ethereum ETFs, the outcome of this review could influence the future classification of Ethereum and related services within the regulatory framework. The increasing likelihood of a Spot Ether ETF approval, currently estimated at 75%, coupled with the SEC's call for firms to revise their 19b-4 submissions, underscores the significance of obtaining clear regulatory guidance in this evolving landscape.

Against this backdrop, Ethereum (ETH) has experienced a bullish trend, fueled by expectations of a potential approval on Thursday, with ETH trading at $3,735 at the time of reporting, reflecting a 0.50% increase from the intraday low.