A flurry of debates in the cryptocurrency realm has emerged following the recent regulatory hearing by the U.S. House Committee on June 13, 2023. The focus was on regulatory clarity within the cryptocurrency sector. In the midst of these discussions, the co-CEO of an under-the-radar cryptocurrency broker, Prometheum, expressed approval for the existing regulatory policies of the U.S. Securities and Exchange Commission (SEC). Despite this, skepticism regarding Prometheum’s legitimacy persists within the crypto community, given the company’s low-profile status and the doubts surrounding the co-CEO’s testimony.
Prometheum: A Mysterious Entity Supporting SEC Regulations, Amidst Controversy and Doubt
Prometheum is the question on every crypto enthusiast’s lips following the statement by its co-CEO, Aaron Kaplan, during the U.S. House Committee hearing. Kaplan emphasized Prometheum’s support for the SEC’s established regulations and securities laws. He lauded the SEC as “the world’s most competent financial market regulatory agency,” asserting that the current framework is “distinctly defined” and that companies seeking new crypto securities laws are simply “unwilling to comply.”
The company echoed its position via a tweet, declaring, “Prometheum’s stance is clear: There is a path forward for digital assets in the U.S. through the current regulatory frameworks set up by federal securities laws.” Despite this, U.S. representative Mike Flood questioned Kaplan, referencing an April 2021 letter by the company seeking more clarity on crypto assets. Flood also asked whether the firm offered its clients the chance to purchase bitcoin (BTC) and ethereum (ETH), to which Kaplan replied negatively.
Matt Walsh, an executive at Castle Island VC, termed the Prometheum episode as extraordinarily peculiar, commenting on the strange choice of this peripheral player with no business model being portrayed as a compliance model by the SEC, while genuine U.S. businesses struggle for a fair opportunity. Despite its 2017 establishment by Benjamin and Aaron Kaplan, Prometheum remains a mystery to the wider cryptocurrency community. Cryptocurrency influencers like Charles Hoskinson, the founder of Cardano, and others expressed their uncertainty and sharp criticism about Prometheum’s identity and role.
Omid Malekan humorously pointed out that Prometheum doesn’t trade anything in demand, wondering who would use it even if it did. He criticized it as a parasitic startup hiding behind regulatory hurdles and licenses instead of competing based on its product merits.
Prometheum Inquiry Intensifies
Adam Cochran from Cinneamhain Ventures revealed several Prometheum executives with ties to regulatory and financial institutions such as the SEC, FINRA, NYSE, and CBOE. Cochran noted that despite issuing a token under Regulation A in 2017, Prometheum has not launched a product yet. He claimed that the company deleted their social media content before 2019, with archived data indicating that their Genesis block was scheduled to launch in 2019. “However, it still can’t clear or settle transactions and, even though registered, it cannot operate,” Cochran noted.
He further pointed out that in 2021 and early 2022, Prometheum hired former staff members from FINRA and SEC, with no apparent product. He also mentioned that the company allegedly secured funds through a partnership with Wanxiang, a supposed affiliate of the CCP, raising $48 million without any product in return. Cochran raised suspicions regarding a $1.5 million payment to Network 1 Financial Securities, a firm with numerous regulatory or civil actions against them, adding that Network 1 had connections to the team behind the Long Island Blockchain scam.
Cochran speculated three possible scenarios about Prometheum’s situation. He suggested that they could be strategic placements to reap benefits from favorable regulatory setups or might be leveraging their SEC and FINRA connections to position themselves as the sole approved entity to monopolize the market. Alternatively, he suggested they might be opportunists who raised considerable funds from dubious sources and have been manipulating their narrative to maintain the ruse.
As the enigma of Prometheum unfolds, the cryptocurrency community is keen to explore the company’s affiliations and history. Prometheum announced in October 2022 that its subsidiary, Prometheum Ember, had launched an SEC-registered marketplace for digital asset securities. The company’s web portal claims to facilitate institutional traders to register, create a custodial account, link it to their trading account, and initiate trading. However, it remains uncertain who uses Prometheum, as the website does not reveal their client institutions.
What is your take on Prometheum’s participation in the regulatory clarity hearing and the doubts about its credibility? We invite you to share your perspectives and opinions about this matter in the comments section below.
Frequently Asked Questions (FAQs) about Prometheum’s credibility
What was the controversy about Prometheum at the recent U.S. House Committee hearing?
At the U.S. House Committee hearing held on June 13, 2023, Prometheum’s co-CEO, Aaron Kaplan, expressed support for the existing regulations and securities laws established by the SEC. This stance drew skepticism from the crypto community given the company’s obscurity and doubts surrounding Kaplan’s testimony.
What was the response from the crypto community to Prometheum’s endorsement of SEC regulations?
The crypto community voiced skepticism and criticism regarding Prometheum’s stance. Some questioned the company’s legitimacy, while others, like Charles Hoskinson and Omid Malekan, openly criticized the firm and its apparent lack of a viable business model.
What were the suspicions raised by Adam Cochran from Cinneamhain Ventures?
Adam Cochran pointed out that Prometheum had hired several executives with past ties to regulatory and financial institutions. He also noted the company had raised funds without having any product to show for it. Moreover, Cochran claimed Prometheum made a payment to Network 1 Financial Securities, a firm with numerous regulatory or civil actions against it.
What services does Prometheum claim to offer?
Prometheum announced the launch of an SEC-registered marketplace for digital asset securities through its subsidiary, Prometheum Ember. This platform supposedly allows institutional traders to register, establish a custodial account, link it to their trading account, and commence trading activities.
Who are the founders of Prometheum?
Prometheum was established in 2017 by Benjamin and Aaron Kaplan. Despite being in operation for a few years, the company remains relatively unknown to the wider crypto community.
More about Prometheum’s credibility
- Prometheum’s Official Website
- SEC (U.S. Securities and Exchange Commission)
- U.S. House Committee on Financial Services
- FINRA (Financial Industry Regulatory Authority)
- Cinneamhain Ventures
- Network 1 Financial Securities
- Cardano Official Website
- Castle Island Ventures
- Long Island Blockchain scam news
- Wanxiang Group