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<p class="is-style-lead">The Blockchain Association, a prominent US crypto lobbying group, has lodged a formal inquiry with the US Securities and Exchange Commission (SEC) to acquire information about the relatively unknown crypto firm, Prometheum.</p>



<p>This move comes after Prometheum&#8217;s CEO, Aaron Kaplan, recently testified at a House hearing, expressing support for regulating cryptocurrencies under securities laws, in contrast to other industry proponents.</p>



<p>On June 15, Marissa Coppel, counsel for the Blockchain Association, expressed skepticism about Prometheum&#8217;s regulatory approval as a special purpose broker-dealer (SPBD) for digital assets, especially given the <a href="https://crypto.news/mark-cuban-calls-for-simplified-sec-crypto-regulations/">SEC&#8217;s ongoing strict enforcement measures</a>. Coppel further questioned how Kaplan could testify at a Congressional hearing on crypto regulations.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">2/ The CEO somehow gets a seat in front of Congress and argues that Prometheum represents the compliant path for digital assets.<br><br>And they&#39;ve paid $1.5+ million in sales commissions to a Chinese-affiliated entity with quite the regulatory track record.<br><br>Hmmm 🤔</p>&mdash; Marisa Tashman Coppel (@MTCoppel) <a href="https://twitter.com/MTCoppel/status/1669358893364047878?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>The Freedom of Information Act (FOIA) request seeks documents and communications about Prometheum, as the Blockchain Association aims to gain insights into the company&#8217;s operations and interactions with the SEC.</p>



<p>FOIA requests enable members of the public to obtain records on various topics from US federal agencies, and in this case, the focus is on the SEC&#8217;s knowledge of Prometheum.</p>




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<h2 class="wp-block-heading" id="experts-weigh-in-on-prometheum-8217-s-regulatory-approach">Experts weigh in on Prometheum&#8217;s regulatory approach</h2>



<p>Industry experts have voiced diverging opinions on Prometheum&#8217;s approach. Rodrigo Seira, special counsel at Paradigm, highlighted that Prometheum intends to list cryptocurrencies classified as securities in a regulated manner.</p>



<p>However, Seira pointed out that the SEC considers most cryptocurrencies unregistered securities, rendering them ineligible for trading on regulated exchanges. </p>



<p>Consequently, Seira argues that Prometheum&#8217;s alternative trading system (ATS) cannot trade any tokens unless projects first register them with the SEC, which is currently deemed impractical.</p>



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Therefore, Prometheum’s ATS won’t be able to trade ANY TOKENS unless projects first register the tokens with SEC<br><br>And as we have pointed out, there are effectively no tokens registered with the SEC because the current regime is not a viable option<a href="https://t.co/XQDjHZobUj" target="_blank">https://t.co/XQDjHZobUj</a></p>&mdash; Rodrigo (@RSSH273) <a href="https://twitter.com/RSSH273/status/1668602504328904707?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 13, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>Prometheum&#8217;s selective listing of cryptocurrencies has attracted scrutiny. During the hearing, when questioned by Republican Congressman Mike Flood about whether Prometheum lists bitcoin (<a href="https://crypto.news/price/bitcoin/" data-type="URL" data-id="https://crypto.news/price/bitcoin/">BTC</a>) or ether (<a href="https://crypto.news/price/ethereum/" data-type="URL" data-id="https://crypto.news/price/ethereum/">ETH</a>), Kaplan stated that it does not include either of them.</p>



<p>Congressman Flood contended that if a regulated exchange like Prometheum cannot list such prominent cryptocurrencies, the claim that no further legislation is required appears illogical.</p>



<p>Additionally, concerns have been raised about the background of the Prometheum team, with some members having previously served at the SEC and the Financial Industry Regulatory Authority (FINRA).</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">And who is running Prometheum? These guys: <a href="https://t.co/SUK5JgjyCA" target="_blank">pic.twitter.com/SUK5JgjyCA</a></p>&mdash; Matt Walsh (@MattWalshInBos) <a href="https://twitter.com/MattWalshInBos/status/1669061652572930048?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 14, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>Joseph Zangri, Prometheum&#8217;s chief compliance officer, worked as an SEC enforcement attorney in the late 1990s. In contrast, Rosemarie Fanelli, the company&#8217;s chief regulatory officer, held senior roles at FINRA for almost 14 years.</p>



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<iframe loading="lazy" title="&quot;Companies that don&#039;t comply with federal securities laws will perish” - Prometheum CEO Aaron Kaplan" width="1020" height="574" src="https://www.youtube.com/embed/k-VoRx3tLQk?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
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<p>Prometheum&#8217;s co-founders and co-CEOs, Aaron and Benjamin Kaplan, also have ties to former SEC staff, as they are attorneys at the law firm Gusrae Kaplan, established by a former Chief Attorney of the SEC&#8217;s Division of Enforcement.</p>



<p>As the debate on crypto regulation continues, the information sought through the FOIA process could provide valuable insights into the SEC&#8217;s stance on Prometheum and its potential implications for the broader market.</p>




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Crypto lobbyists seek SEC info on regulatory approval for Prometheum

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