A crypto trading firm has gotten FINRA approval. It hopes the SEC is next.

While crypto is in the spotlight, Prometheum hopes to trade blockchain securities — with regulatory approval in hand.

SEC headquarters in Washington

Prometheum co-CEO Aaron Kaplan is hoping to get SEC approval for his trading system.

Photo: Saul Loeb/AFP via Getty Images

Startup Prometheum said Wednesday it had received approval from FINRA to operate an alternate trading system, or ATS, for trading digital assets including blockchain-based securities.

Prometheum now needs to get approval from the SEC and then can begin trading, co-CEO Aaron Kaplan says. The approval for subsidiary Prometheum Ember ATS Inc., or PEATS, includes trading by accredited and non-accredited investors.

Trading on the Prometheum system would differ from current crypto exchanges in that the assets on the platform will all be regulated as securities and the system itself would be regulated — if the SEC approves.

And then there's the regulatory scheme it will operate under. Exchanges such as Coinbase in the U.S. sometimes fall under state money transmitter licenses, though some states like Alaska and California have taken the position that such licenses don't apply to crypto businesses, leaving them in a regulatory gap. SEC Chairman Gary Gensler has raised concerns about the lack of regulatory oversight of crypto exchanges.

An ATS is an SEC-regulated trading system, sometimes known as a dark pool. An ATS matches buyers and sellers of securities but is typically regulated as a broker-dealer, not an exchange.

PEATS will offer trading for both retail investors and professionals and provide automated know-your-customer and anti-money laundering checks, the company says. Anchorage Digital Bank, a chartered bank, is providing custody and settlement for the ATS.

Prometheum is one of several companies that have been building new systems to enable trading of digital assets.

Competitor tZERO also has an ATS for trading digital securities, which it says did the first trade of a blockchain-based security in 2016 and says it did $39 million in digital securities transactions in the third quarter of 2020., the online retailer which took a detour into blockchain businesses recently, is in the process of spinning tZERO off.

Prometheum sees itself as taking a different route than many crypto exchanges by focusing on getting regulatory approval first. Kaplan believes that many cryptocurrencies could be deemed securities by the SEC and thus end up needing to be traded on regulated exchanges.

"[I]f something's a security and deemed to be a security, then the only place that could trade it would have to be for registered securities — and places that are operating under the money transmitter laws aren't necessarily authorized to do so," Kaplan said.

Kaplan says he believes Prometheum is in a good regulatory position, citing Gensler's comments on crypto exchanges needing regulation.

The SEC has not made a wholesale indication of which digital assets are or aren't securities — though it has said that bitcoin and ether aren't. The SEC has filed a lawsuit against Ripple alleging that the token it backs, XRP, is a security.

Prometheum has been seeking this ATS approval for several years. It required an initial application to FINRA, followed by a back-and-forth with the industry self-regulatory body, an interview, a demonstration and follow-up, Kaplan said.

To help on the regulatory front, Prometheum recently hired Rosemarie Fanelli as chief regulatory officer. She previously worked for 13 years at FINRA and also worked for the NYSE.

While this sort of official sign-off is hard to get, there have been recent regulatory actions that have signaled more clarity for what Prometheum is doing, Kaplan says.

In September, a no-action letter from the SEC to FINRA indicated that broker-dealers could operate alternative trading systems for digital assets, provided they maintain $250,000 in net capital, don't settle trades and ensure that the assets are registered with regulators and that transactions comply with securities laws.

Issuers of crypto tokens can register the digital assets as securities with the SEC, but not many have done so, which could limit the offerings on Prometheum's ATS in the near term.

Prometheum, once it gets SEC approval, aims to be live "in the coming months," Kaplan said.

Maria Renz: Gopuff will make it through the fast-delivery slump

Maria Renz on her new role, the state of fast delivery and Gopuff’s goals for the coming year.

Gopuff has raised $4 billion at a $15 billion valuation.

Photo: Gopuff

The fast-delivery boom sent startups soaring during the pandemic, only for them to come crashing down in recent months. But Maria Renz said Gopuff is prepared to get through the slump.

“Gopuff is really well-positioned to weather through those challenges that we expect in the next year or so,” Renz told Protocol. “We're first party, we control elements of our mix, like price, very directly. And again, we have nine years of experience.”

Keep Reading Show less
Sarah Roach

Sarah (Sarahroach_) writes for Source Code at Protocol. She's a recent graduate of The George Washington University, where she studied journalism and criminal justice. She served for two years as editor-in-chief of GW's independent newspaper, The GW Hatchet. Sarah is based in New York, and can be reached at

Some of the most astounding tech-enabled advances of the next decade, from cutting-edge medical research to urban traffic control and factory floor optimization, will be enabled by a device often smaller than a thumbnail: the memory chip.

While vast amounts of data are created, stored and processed every moment — by some estimates, 2.5 quintillion bytes daily — the insights in that code are unlocked by the memory chips that hold it and transfer it. “Memory will propel the next 10 years into the most transformative years in human history,” said Sanjay Mehrotra, president and CEO of Micron Technology.

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.

AT&T CTO: Challenges of the cloud transition are interpersonal

Jeremy Legg sat down with Protocol to discuss the race to 5G, the challenges of the cloud transition and nabbing tech talent.

AT&T CTO Jeremy Legg spoke with Protocol about the company's cloud transition and more.

Photo: AT&T

Jeremy Legg is two months into his role as CTO of AT&T, and he has been tasked with a big mandate: transforming the company into a software-driven business, with 5G and fiber as core growth areas.

This isn’t Legg’s first CTO gig, just his biggest one. He’s an entertainment biz guy who’s now at the center of the much bigger, albeit less glamorous, telecom business. Prior to joining AT&T in 2020, Legg was the CTO of WarnerMedia, where he was the technical architect behind HBO Max.

Keep Reading Show less
Michelle Ma

Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at


How Canva uses Canva

Design tips and tricks from the ultimate Canva pros: Canva employees themselves.

Employees use Canva to build the internal weekly “Canvazine,” product vision decks, team swag and more.

Illustration: Christopher T. Fong/Protocol

Ever wondered how the companies behind your favorite tech use their own products? We’ve told you how Spotify uses Spotify, How Slack uses Slack and how Meta uses its workplace tools. We talked to Canva employees about the creative ways they use the design tool.

The thing about Canva is that it's ridiculously easy to use. Anyone, regardless of skill level, can open up the app and produce a visually appealing presentation, infographic or video. The 10-year-old company has become synonymous with DIY design, serving as the preferred Instagram infographic app for the social justice “girlies.” Still, the app has plenty of overlooked features that Canvanauts (Canva’s word for its employees) use every day.

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at


GitHub’s CEO wants to go passwordless by 2025

Thomas Dohmke sat down with Protocol to talk about what the open-source code hosting site is doing to address security vulnerabilities, including an aim to go passwordless by 2025.

GitHub CEO Thomas Dohmke spoke to Protocol about its plan to go passwordless.

Photo: Vaughn Ridley/Sportsfile for Collision via Getty Images

GitHub CEO Thomas Dohmke wants to get rid of passwords.

Open-source software has been plagued with cybersecurity issues for years, and GitHub and other companies in the space have been taking steps to bolster security. Dohmke knows, however, that to get to the root of the industrywide problem will take more than just corporate action: It will ultimately require a sea change and cultural shift in how developers work.

Keep Reading Show less
Michelle Ma

Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at

Latest Stories