Blockchain association calls for investigation into Prometheum over alleged ‘darling’ SEC deal

The United States-based crypto advocacy group Blockchain Association has sent a letter to the Office of the Inspector General of the Securities and Exchange Commission (SEC) calling for an investigation into crypto company Prometheum.

In a July 12 letter, the Blockchain Association requested SEC inspector general Deborah Jeffrey is looking into the Financial Industry Regulatory Authority’s approval of Prometheum’s special purpose broker-dealer license (SPBD). The group also raised concerns about the way co-CEO Aaron Kaplan got a seat to testify before the US House Financial Services Committee in June.

Advocacy groups say the fact that Prometheum may obtain an SPBD license in May 2023 is “concerning” given the uncertainty surrounding US securities laws that apply to crypto companies. According to the Blockchain Association, Prometheum changed its public position seeking regulatory clarification from the SEC in April 2021 to claim “there is a clear pathway for digital asset registration and legislation is not required”.

“We are concerned that the Commission is giving Prometheum a ‘lover’ deal in return for supporting the Commission’s policy objectives, or that Prometheum is taking advantage of its personal relationship with the Commission to gain an unfair advantage in the marketplace,” the association said. “Most significantly, we are concerned that Chair Gensler is using Prometheum and the SPBD licensing process as a means to thwart congressional efforts against the law by continuing to spread a false narrative that the law is clearly related to digital asset securities.”

1/ Today, @blockchainassn sent a letter to the Office of the SEC Inspector General requesting OIG to open an investigation into potential irregularities surrounding Prometheum’s approval as its first Special Purpose Intermediary Agent.@KMSmithDC stated:

— Blockchain Association (@BlockchainAssn) July 12, 2023

Related: Blockchain Association seeks info from Fed, FDIC and OCC about ‘de-banking’ crypto companies

Calls for an investigation into Prometheum follow Freedom of Information Act requests from advocacy groups in June seeking documents and communications relating to the company’s licenses. According to the Blockchain Association, it is still “waiting for answers” regarding the information.

Cointelegraph reached out to Prometheum co-CEO Aaron Kaplan but received no response at the time of publication. Several US lawmakers have also called for a Department of Justice and SEC investigation into Prometheum into alleged ties to the China-based company, which appear to have nothing to do with the Blockchain Association allegations.

Magazine: Crypto Regulation: Does SEC Chairman Gary Gensler have the final say?

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