Prometheum Expands Into Tokenization, Acquiring a Broker-Dealer and Launching a Digital Transfer Agent

The controversial digital asset securities firm is aiming to achieve a jumpstart in the lucrative tokenization boom

Prometheus, the digital asset securities firm, is aiming to get a headstart in the lucrative tokenization boom by acquiring a broker-dealer and launching a digital transfer agent registered with the U.S. Securities and Exchange Commission, the company told CoinDesk.

The firm’s newly acquired FINRA-member and SEC-registered broker-dealer, ProFinancial, can offer primary sales of various securities products, giving issuers a pathway to raise capital directly in tokenized form. Meanwhile, Prometheum Coinery will handle shareholder records and corporate actions both on and off the blockchain.

The additions build on existing services for custody, clearing and secondary trading via its affiliated broker-dealers, Prometheum Capital and Prometheum ATS.

With the latest move, the company aims to position as one of the few U.S.-regulated players offering a vertically integrated route for bringing real-world assets into a blockchain-native format – a capability likely to become more critical as the tokenization trend matures.

“Securities, commodities, everything else is moving on-chain, and there needs to be an infrastructure for that. [There's] a pie that's going to grow significantly, just like everything went from paper to electronic. We are in a prime position, in my opinion, to be a significant player in that growing ecosystem,” Aaron Kaplan, co-CEO told CoinDesk in an interview.

The expansion comes as asset tokenization emerges as one of the fastest-growing corners of crypto tech at a time when U.S. regulators signal a friendlier approach towards digital assets. Tokenization stands for using blockchain rails for moving and managing traditional instruments like bonds, funds and other securities, with global asset managers and banks increasingly getting involved to achieve operational efficiencies and cheaper, faster settlements. It's potentially a lucrative opportunity: the tokenized asset market could balloon to multiple trillion dollars over the next few years, a range of reports from BCG, Ripple, McKinsey, 21Shares projected.

It's no surprise then that tokenization firms are jockeying for position to seize the opportunity as the sector heats up. Recently, digital asset manager Superstate registered its transfer agent with the SEC and unveiled a tokenized equity trading platform. Securitize, a tokenization firm backed by BlackRock and Jump Crypto, purchased MG Stover's fund administration business, while financial services provider Apex Group last week announced the acquisition of tokenization specialist Tokeny.

Prometheum, founded in 2017, made headlines over the past years with efforts to comply with the Gary Gensler-led SEC, known for its harsh stance towards crypto. The company also divided the digital asset industry with wanting to provide securities-focused services for cryptocurrencies like ether

With the new entities, the firm is now able to offer a fully-integrated platform for tokenized securities, from initial issuance to secondary market trading and custody, all within U.S. securities laws, something that's difficult to achieve, Kaplan argued.

"It's a much bigger lift than what was done previously with these other [tokenization] firms. Creating a digital token of an asset is the ‘low-hanging fruit,’ while being able to handle trading and post-trading are ‘exponentially harder’," Kaplan explained.

"The harder parts are what we built first. Other [firms] went the other route, which was the lowest hanging fruit first, and they've had a harder time transitioning the other way.

"So with this announcement, it's pretty clear that the low-hanging fruit is in our purview."

Jesse Hamilton contributed reporting.