SEC May Investigate Prometheum ‘Backroom Deal’

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Congressman Richie Torres has filed a formal request to investigate the controversial relationship between the Securities and Exchange Commission (SEC) and cryptocurrency platform Promethium, marking the latest move in a legal and political storm involving the SEC.

🚨 @SECGov is secretly enforcing the speed limit and ticketing drivers like an overzealous traffic cop.

Prefers consensus through enforcement rather than rules or directives. But this is no way to control digital assets.

I am calling for an investigation. pic.twitter.com/n0hijAREDC

– Representative. Ritchie Torres (@RepRitchie) July 13, 2023

Torres sent letters to SEC Inspector General Deborah Jeffrey and Government Accountability Office Comptroller General Dodaro on July 13. Frustrated by the SEC's lack of clarity in applying securities laws to digital assets, the commission also emphasized the use of enforcement over rulemaking or guidance:

“The SEC is an overzealous traffic agent. Enforcement is not a way to regulate.

Torres' criticism centered on the SEC's decision in May to grant a special purpose broker-dealer (SPBD) license to Promethium. In the year The crypto platform, which was established in 2017, has attracted suspicion because it is seen as a political tool rather than a legitimate trading platform.

Promethium co-founder Aaron Kaplan became a controversial figure after a congressional hearing in June endorsed the SEC's current regulatory approach. Kaplan's endorsement, coupled with flurry of social media speculation about Promethium's possible ties to Chinese investors, only added to the growing debate surrounding the platform.

Marisa Tashman Koppel, a member of the Blockchain Association, filed a request with the SEC on June 15 asking for transparency on Promethium, calling it “skeptical.”

2/ The CEO somehow sat in front of Congress and argued that Prometheus represented a compliant path to digital assets.

And paid $1.5+ million in sales commissions to a Chinese affiliate.

Hmmm 🤔

— Marisa Tashman Coppel (@MTCoppel) June 15, 2023

A month later, a group of US lawmakers pushed the SEC to investigate the company's ties to the Chinese Communist Party.

As Torres convenes to investigate the SEC's process to register digital asset platforms and its arrangement with Prometheum, Jeffrey;

“Examine the SEC's failure to create a strict but workable process to register real-world digital assets platforms and investigate the SEC's unusual backroom deal with Promethium.”

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