The Blockchain Association, a US-based cryptocurrency advocacy group, has submitted a letter to the US Securities and Exchange Commission's (SEC) Office of Inspector General, urging an investigation into cryptocurrency firm Prometheum. In the letter dated July 12, the asso ciation called for an examination of the approval granted by the Financial Industry Regulatory Authority (FINRA) for Prometheum's special purpose broker-dealer (SPBD) license. The group also expressed concerns regarding the testimony of Prometheum's co-CEO Aaron Kaplan before the US House Financial Services Committee in June.
The Blockchain Association raised alarm over the issuance of Prometheum's SPBD license in May 2023, citing the uncertainty surrounding the applicability of US securities laws to cryptocurrency companies. They pointed out that Prometheum had previously advocated for clear reg regulation by the SEC in April 2021, but subsequently changed its stance by claiming that a clear path to register digital assets existed without the need for legislation. The association expressed concerns about a potential "sweetheart" deal being offered to Prometheum in exchange for supporting the SEC's policy objectives or Leveraging personal relationships to gain an unfair advantage in the market. They also questioned whether SEC Chairman Gary Gensler was using the Prometheum and SPBD licensing process to hinder congressional legal efforts.
Prior to calling for the investigation, the Blockchain Association filed a Freedom of Information Act request in June, seeking access to documents and communications related to Prometheum's license. However, they have yet to receive a response to their request. Meanwhile, several US lawmakers have independently called for the Justice Department and the SEC to investigate alleged ties between Prometheum and Chinese companies, which appear to be unrelated to the concerns raised by the Blockchain Association.
The Blockchain Association's letter to the SEC's Office of Inspector General underscores the increasing scrutiny and calls for transparency within the cryptocurrency industry. As the regulatory landscape evolves, stakeholders are urging thorough investigations to ensure compliance with exist ing laws and to address potential conflicts of interest or unfair advantages. The outcome of any investigation into Prometheum's SPBD license and related matters will shed light on the regulatory framework surrounding digital assets and the actions of industry participants.
