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Uniswap

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The United States has a second special purpose broker-dealer (SPBD) for digital asset securities. The Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) have approved tZero Digital Asset Securities as a digital asset SPBD, giving it the right to custody digital asset securities on behalf of retail and institutional clients.
Its new status allows SEC-regulated alternative trading system operator tZero to carry out custody, clearance and settlement of securities without a third-party custodian, making tZero a “one-stop shop” for digital asset security issuance and secondary trading, the company <a data-ct-non-breakable="null" href="https://www.prnewswire.com/news-releases/tzero-receives-landmark-approval-to-custody-digital-securities-and-support-end-to-end-digital-securities-lifecycle-in-the-united-states-302242412.html" rel="null" target="null" text="null" title="null">said</a> in a statement. The company helps private companies go public through securities offerings.
<h2 id="tzero-wants-to-set-an-example">tZero wants to set an example</h2>
tZero has a “long-standing position that many digital assets in the market constitute securities under existing legal frameworks,” it said. Although that claim is widely disputed in the crypto world, tZero will treat digital assets as securities when it provides custody of them. tZERO chief legal and corporate affairs officer Alan Konevsky said:
<blockquote>
 “We will leverage this unique opportunity, on behalf of the digital asset industry at large, to illustrate how positive regulatory clarity can produce real-world innovation, novel products and real commercialization across of range of traditional financial and real world assets.”
</blockquote>
The new service will be available early in 2025. The full digitization of tZERO’s Series-A preferred equity security (TZROP) will be its first product.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/cftc-chair-bitcoin-ethereum-commodities-senate-testimony" rel="null" target="null" text="null" title="null">CFTC chair reiterates BTC and ETH are commodities in testimony</a>
<h3 id="putting-compliance-before-the-rule">Putting compliance before the rule</h3>
Prometheum raised eyebrows in the crypto world when it <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/prometheum-subsidiary-receives-finra-approval-for-digital-asset-qualified-custody" rel="null" target="null" text="null" title="null">became the first recipient</a> of the SPBD designation for digital securities in May 2023. Like tZero, Prometheum was a minor player in the digital asset market. Its SPBD designation <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/who-is-prometheum-what-testify-congress-about-crypto-sec" rel="null" target="null" text="null" title="null">set off a chorus</a> of disapproval and accusations of favoritism.
<figure>
 <img alt="tZero becomes 2nd FINRA-approved broker-dealer for digital securities" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191ddcc-7dcd-7916-b2e4-6fedc7b8b838">
 <figcaption style="text-align: center;">
 Source: <a data-ct-non-breakable="null" href="https://x.com/Alan_Konevsky/status/1833494842778820817" rel="nofollow noopener" target="_blank" text="null" title="https://x.com/Alan_Konevsky/status/1833494842778820817">Alan Konevsky</a>
 </figcaption>
</figure>
Prometheum treated Ether (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethereum-price" rel="null" target="null" text="null" title="null">ETH</a>) <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/prometheum-launches-ether-custody-service-treats-eth-security" rel="null" target="null" text="null" title="null">as a security</a> and <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/prometheum-uniswap-arbitrum-digital-securities" rel="null" target="null" text="null" title="null">later added Uniswap</a> (<a data-ct-non-breakable="null" href="https://cointelegraph.com/uniswap-price-index" rel="null" target="null" text="null" title="null">UNI</a>) and Arbitrum (<a data-ct-non-breakable="null" href="https://cointelegraph.com/arbitrum-price-index" rel="null" target="null" text="null" title="null">ARB</a>) to the list of “securities” it custodied. The SEC launched an investigation into Ethereum to determine whether it would consider it a security but <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sec-to-drop-ethereum-investigation-says-consensys" rel="null" target="null" text="null" title="null">dropped the investigation</a> in June.
tZero began its existence as a cryptocurrency and securities exchange spun off from Overstock.com. It <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/overstock-funded-tzero-crypto-exchange-will-shut-down-march-6" rel="null" target="null" text="null" title="null">closed its cryptocurrency arm</a> in February 2023.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/5-ways-crypto-bots-are-ruining-crypto-including-auto-memecoin-rug-pulls/" rel="null" target="null" text="null" title="null">How crypto bots are ruining crypto — including auto memecoin rug pulls</a>

tZero becomes 2nd FINRA-approved broker-dealer for digital securities

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