The United States-based crypto advocacy group, Blockchain Association, has called for an investigation into Prometheum, a crypto firm, regarding its alleged “sweetheart” deal with the Securities and Exchange Commission (SEC). In a letter to the SEC’s Office of Inspector General, the association expressed concerns about Prometheum’s changing stance on regulatory clarity and questioned the circumstances under which the firm obtained a special purpose broker-dealer license.
The Blockchain Association specifically requested an investigation into the approval process of Prometheum’s special purpose broker-dealer license by the Financial Industry Regulatory Authority (FINRA). Additionally, the group raised concerns about co-CEO Aaron Kaplan’s participation in testifying before the U.S. House Financial Services Committee, questioning how he secured the opportunity.
The association found it concerning that Prometheum obtained the special license in May 2023, considering the existing ambiguity surrounding U.S. securities laws applied to cryptocurrency firms. The Blockchain Association highlighted the shift in Prometheum’s public stance from advocating for regulatory clarity from the SEC in April 2021 to claiming there was already a clear pathway to registration for digital assets, rendering legislation unnecessary.
Expressing suspicion, the Blockchain Association suggested that Prometheum may have received a favorable treatment from the SEC in exchange for supporting the commission’s policy goals. They also raised concerns about Chair Gensler potentially utilizing Prometheum’s licensure process to impede congressional efforts towards legislation by spreading false information about the clarity of the law regarding digital asset securities.
Earlier, in June, the Blockchain Association had submitted a Freedom of Information Act request seeking documents and communications related to Prometheum’s license. However, they claimed to be waiting for answers at the time of their call for investigation.
While the association’s request for an investigation is unrelated to allegations of ties between Prometheum and China-based firms, several U.S. lawmakers have separately called for a Department of Justice and SEC investigation into Prometheum on those grounds.
The Blockchain Association’s concerns highlight the need for transparency and fairness in the regulatory processes surrounding cryptocurrency firms. By urging an investigation, they aim to shed light on any potential impropriety and ensure that regulatory clarity is achieved without compromising market integrity or favoring specific entities.