Prometheum finds itself under scrutiny as the Blockchain Association, a prominent crypto advocacy group based in the United States, takes action.
In a letter addressed to the Office of Inspector General at the US Securities and Exchange Commission (SEC), the Blockchain Association calls for a comprehensive investigation into Prometheum’s activities.
The primary focus of the investigation request revolves around the approval of Prometheum’s special purpose broker-dealer (SPBD) license by the Financial Industry Regulatory Authority (FINRA).
The Blockchain Association urges SEC Inspector General Deborah Jeffrey to examine the circumstances surrounding this approval, raising concerns about potential irregularities.
The Blockchain Association expresses unease regarding the manner in which co-CEO Aaron Kaplan secured an opportunity to testify before the US House Financial Services Committee in June.
This aspect of Prometheum’s involvement in the regulatory process further deepens the association’s concerns and prompts the call for an investigation.
Questions Arise Over Prometheum SPBD License
Prometheum’s recent acquisition of an SPBD license from the FINRA, under the purview of the SEC, has sparked suspicion within the Blockchain Association and the wider crypto industry.
This is because of the fact that Prometheum had previously been a vocal critic of the SEC’s application process, making the SEC’s decision to grant the license seem questionable.
1/ Today, @blockchainassn submitted a letter to the SEC Office of Inspector General requesting the OIG open an investigation into potential impropriety surrounding the approval of Prometheum as a first-of-its-kind Special Purpose Broker-Dealer.@KMSmithDC stated: pic.twitter.com/dVtTs0yMEg
— Blockchain Association (@BlockchainAssn) July 12, 2023
In a letter submitted by the association, they express concerns about the SEC’s potential motives behind granting Prometheum the SPBD license.
They suggest the possibility of a “sweetheart” deal, where the SEC offered favorable treatment to the company in exchange for the company’s support of the SEC’s policy objectives.
Alternatively, the association raises the concern that Prometheum may be leveraging personal connections within the commission to gain an unfair advantage in the market.
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The shockwaves reverberated throughout the industry when Prometheum became the first-ever cryptocurrency exchange to secure an SPBD license from FINRA in May 2023.
Investigation Triggered by FOIA Request
Prompted by an unresolved Freedom of Information Act (FOIA) request, the Blockchain Association intensified its call for an investigation into the entity.
In June, the advocacy group submitted the FOIA request to obtain documents and communications pertaining to Prometheum’s license.
However, as of now, the Blockchain Association claims to be in a state of limbo, eagerly awaiting the requested information.
As the FOIA request remains unresolved, the pressure on the SEC’s Office of Inspector General increases, pushing for a swift investigation to provide the association and the broader industry with the necessary insights and clarity they seek.
Featured image from Crypto Basic