PANews reported on May 21 that the controversial crypto platform Prometheum's move to offer Ethereum custody services has sparked strong opposition from a cryptocurrency advocacy group, which claims it is colluding with the U.S. Securities and Exchange Commission (SEC). Prometheum launched its Ethereum custody services on Friday, after months of anticipation, willing to protect assets on behalf of clients. The issue is that Prometheum's service classifies Ethereum as a security under the SEC's jurisdiction. The SEC has not made this declaration, although the agency has been accused of internally using this basis in its ongoing crackdown on the expanding crypto industry. Last month, Consensys filed a lawsuit against the SEC seeking court confirmation that Ethereum is not, in fact, a security.

In a statement regarding Prometheum's announcement, the Cedar Innovation Foundation said: "This announcement is just the latest attempt by the SEC to drive the cryptocurrency market out of the United States. Both the SEC and Prometheum have separately declared ETH to be a security." Reportedly, while the company has not yet launched trading of Ethereum as a security, providing custody services for clients is seen as a preliminary step. The Cedar Innovation Foundation claims that Prometheum's business is part of a "desperate attempt to misclassify ETH as a security," and believes this plan will be thwarted through litigation. The organization called out SEC Chairman Gary Gensler, stating, "It's time for Congress to put an end to Gary Gensler's political machinations."

Previously, in May last year, Prometheum announced that it had obtained the first special-purpose broker-dealer license under SEC guidelines, which would allow it to custody digital asset securities.