In the world of crypto, where top exchanges such as Binance and Coinbase face scrutiny from US regulators like the US Securities and Exchange Commission (SEC), the recent SEC and FINRA approval of lesser-known firm Prometheum has stirred up heated discussions within the community.
This New York-based company caught the public eye during the US House Financial Services Committee hearing on “The Future of Digital Assets” held on June 13. Prometheum co-CEO Aaron Kaplan’s late inclusion as a witness raised questions from observers. The company’s approval by the SEC and FINRA was criticized as “nonsense” by Representative Mike Flood, primarily because Prometheum does not offer trading in top crypto assets like Bitcoin (BTC) and Ethereum (ETH).
Despite the criticism, Kaplan insists that the only way forward for the digital asset industry in the US is through adhering to the current regulatory frameworks established by the SEC. Detractors within the crypto community argue that Kaplan was simply parroting the views of Democratic members of Congress and the SEC, as he appeared to read from pre-written notes.
Matt Walsh, partner at Castle Island Ventures, brought attention to some unusual facts about Prometheum in a series of tweets, citing its investors Wanxiang Blockchain and Hashkey Capital and highlighting the payment of $1.5 million in sales commissions to Network 1 Financial Securities. Kaplan’s narrative echoed the preferred market structure of Gary Gensler-led SEC, where most cryptos are considered securities. Gensler contends that a regulated crypto exchange can operate as long as it doesn’t actually facilitate the purchase or sale of cryptocurrencies.
The controversy surrounding Prometheum has caught the attention of figures like Cardano co-founder Charles Hoskinson and Gemini co-founders Tyler and Cameron Winklevoss, who have criticized the SEC and Prometheum for their stance on crypto markets.
Recently, Prometheum Ember Capital became the first SEC-qualified firm to offer custody of digital assets after receiving FINRA approval as a special purpose broker-dealer (SPBD) for digital assets. However, the approval is viewed with suspicion by some, as many Prometheum employees are former SEC and FINRA staffers. Accusations of under-the-radar operations within the firm have only fueled the fire of the ongoing debate.
The conflicting views on Prometheum and its regulatory approval raise questions about what the future of digital assets and crypto markets may look like, as well as the role of established regulatory frameworks in the rapidly evolving world of blockchain technology.
Source: Coingape
