In the latest regulatory developments, U.S. Senator Thomas Tuberville has urged Attorney General Merrick Garland and SEC Chair Gary Gensler to probe into Prometheum, a special-purpose broker that has recently acquired federal permissions to offer crypto trading services. His call for investigation revolves around a skepticism that the firm may have provided dubious testimony to Congress or violated U.S. securities laws.
The said allegation stems from the inconsistency in Prometheum’s statements. The CEO, Aaron Kaplan, claimed the development of the company’s own blockchain platform started independently in December 2019. However, in its SEC filings throughout 2021, Prometheum attributed its growth to its dependency on Shanghai Wanxiang Blockchain, Inc., a Chinese firm allegedly connected to the Chinese Communist Party.
Senator Tuberville’s concern emerges from this mismatch in testimony and documentation. The purpose of this development independently was not made explicit in Prometheum’s SEC submissions. Furthermore, why would the broker continue to assert its developmental commitment with its partners, Wanxiang and its subsidiary Hashkey, in the said filings, if it had initiated its own technology platform?
Notably, this is not Tuberville’s first instance of expounding on this apprehension. In a previous opinion piece for the Wall Street Journal, he argued that Prometheum’s links to Wanxiang and its broker approval could potentially pose data security risks and privacy threats to American investors.
Nevertheless, Kaplan’s defense is that although Wanxiang holds a 20% stake in Prometheum, it has no access to the company’s data and technology. Moreover, the SEC has previously scrutinized this relationship. Yet, Prometheum has received significant backlash from the crypto community, where many believe that Prometheum’s proposed model for trading crypto assets as securities is not feasible.
The remarkable effort to press for an investigation into Prometheum received shared concerns from Congressmen Blaine Luetkemeyer, Barry Loudermilk, Ralph Norman, Byron Donalds, and Mark Alford, who co-signed Senator Tuberville’s letter.
Ultimately, this case represents a potential discrepancy within Prometheum’s reported dealings and developments and poses crucial questions about the robustness and transparency of regulatory bodies for investor protection and maintaining the integrity of legislative processes. It brings into focus the need for consistent vigilance and skepticism, even in new and emerging areas of technology such as the blockchain.
Source: Coindesk
