You’re not alone if you’d never heard of the crypto company Prometheum until this week. Yet, the corporation has apparently overnight become the Securities and Exchange Commission’s poster child for compliance, a shining example of regulatory certainty in a sector rife with “hucksters, fraudsters, and scam artists,” according to SEC Chair Gary Gensler.
With the testimony of Aaron Kaplan, co-founder of under-the-radar crypto company Prometheum, the regulatory trajectory in the digital currency ecosystem may have become more convoluted. Apart from being a relatively obscure figure in the crypto market, the Prometheum CEO looks to be on the same page as the SEC when it comes to regulating the industry.
Kaplan spoke before the United States House of Representatives on June 13 to address giving regulatory clarity to the crypto business.
In contrast to previous comments from crypto sector leaders such as Coinbase, Kaplan’s testimony seems to be in favor of regulating cryptocurrency under existing securities regulations, a viewpoint echoed by the SEC.
This event not only met with mixed opinions but also created a legal basis for legal authorities to implement policies to suppress the cryptocurrency industry, when industry entities themselves voiced support for this.
Marissa Coppel, attorney for the Blockchain Association, said that the organization filed a Freedom of Information Act (FOIA) request with the SEC requesting records and correspondence relating to Prometheum.
Coppel expressed”suspiciousness that Prometheum was authorized as a special purpose broker-dealer (SPBD) for digital assets in the midst of intense SEC enforcement. She was similarly doubtful about Kaplan’s ability to testify before a congressional hearing on industry rules.
1/ Today @BlockchainAssn FOIA’d the SEC seeking information (docs & comms) about Prometheum and the ATS.
In the midst of aggressive SEC enforcement, Prometheum gets approval for first-of-its-kind Special Purpose Broker-Dealer (SPBD) for digital asset securities.
Suspicious…
— Marisa Tashman Coppel (@MTCoppel) June 15, 2023
Gemini co-founder Tyler Winklevoss said that the SEC chose to sue Gemini, Coinbase, and Kraken for not complying with securities laws, but at the same time approved Prometheum. He also pointed out suspicious points that show which side this company is on, or just an effective arm of the SEC?
The @SECGov has chosen to sue @Gemini, @coinbase, and @krakenfx for not complying with securities laws and yet at the same time has approved @PrometheumInc.
Here are some highlights that set Prometheum apart:
-Failed to launch a product in 6 years
-Hired multiple former SEC and… https://t.co/YsgUCcIjM5— Tyler Winklevoss (@tyler) June 15, 2023
After disclosing important details about the company, market analyst Matt Walsh is still perplexed as to how the SEC can hold a corporation with no recognized business plan up as the benchmark of compliance for the whole sector.
Other companies like Coinbase and Gemini have pursued the B/D and ATS paths. Those licenses under current SEC regs don’t let you do much. The SEC is implying the Prometheum path solves the regulatory clarity issues. It doesn’t.
— Matt Walsh (@MattWalshInBos) June 14, 2023
While Republican legislators continue to pursue America’s financial watchdog and Gensler in the aftermath of enforcement actions against Binance and Coinbase, Prometheum’s apparent success with regulators aligns perfectly with Gensler’s frequent assertions that disobedience is a choice.
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