New York-based crypto firm Prometheum has recently made waves in the crypto community by securing approval from the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). This development comes when significant players in the crypto space, such as Binance and Coinbase, are facing increased scrutiny from US regulators.
Prometheum came into the spotlight during the US House Financial Services Committee hearing titled “The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem,” held on June 13. However, the announcement of Prometheum’s co-CEO, Aaron Kaplan, as a witness at the end of the hearing raised eyebrows and prompted questions.
During the committee hearing, Representative Mike Flood dismissed Prometheum’s approval from the SEC and FINRA as “nonsense.” He pointed out that the firm does not offer trading in popular cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). Despite Flood’s skepticism, Kaplan argued that adhering to the existing regulatory frameworks established by the SEC is the way forward for the digital asset industry in the United States. However, some crypto community members accused Kaplan of delivering pre-written notes that echoed the narratives of Democratic members of Congress or the SEC.
Prometheum’s approval has sparked further controversy, with Castle Island Ventures partner, Matt Walsh, sharing peculiar details about the firm. Walsh revealed that Prometheum’s investors include Wanxiang Blockchain and Hashkey Capital, and the company paid $1.5 million in sales commissions to Network 1 Financial Securities. These revelations have raised concerns and cast a shadow over the legitimacy of Prometheum’s operations.
Additionally, Kaplan’s statements align closely with the views expressed by SEC Chair Gary Gensler, who believes that most cryptocurrencies should be classified as securities. Gensler maintains that a regulated crypto exchange can operate if it does not facilitate the direct purchase or sale of cryptocurrencies.
Crypto Community Expresses Skepticism Towards Prometheum, Highlighting Lack Of Familiarity”
The crypto community, including prominent figures like Cardano co-founder Charles Hoskinson and Gemini co-founders Tyler and Cameron Winklevoss, has expressed skepticism towards Prometheum. Many community members admit to having little knowledge about the relatively unknown firm.
In May, Prometheum Ember Capital, a subsidiary of Prometheum, became the first SEC-qualified firm to offer custody services for digital assets after receiving FINRA’s approval to operate as a special purpose broker-dealer (SPBD) for digital assets. However, this approval has drawn controversy, as it has been revealed that several Prometheum employees are former SEC and FINRA staffers, prompting concerns about potential conflicts of interest.
According to Adam Cochran, the approval process raises controversy due to the significant number of former SEC and FINRA employees among Prometheum’s staff. Cochran has further disclosed information about the company’s covert operations and provided insights into its workings.