- Prometheum has filed a defamation lawsuit against cryptocurrency professional Matthew Blumberg
- Blumberg’s comments on social media criticized Prometheum’s regulatory status and dealings with the SEC
- The defendant argues the comments were protected opinions under New York’s anti-SLAPP law
Prometheum, possibly the most hated project in the crypto space, has initiated a defamation lawsuit against critic Matthew Blumberg, alleging false and damaging comments about its operations and regulatory approvals. The complaint, filed in the New York Supreme Court, stems from a series of social media posts made by Blumberg in November 2024, which Prometheum claims constitute defamatory statements. Blumberg has filed to dismiss the case, stating that his comments were opinions rather than statements of fact.
“Sweetheart Deal” Allegations Prove Too Rich
Prometheum gained attention in May 2023 after securing the first SPBD license for digital asset securities from the U.S. Securities and Exchange Commission (SEC), making it appear to be a pioneer in the crypto sector’s formal regulatory compliance. This approval occurred while industry giants like Coinbase struggled to gain similar licenses, prompting criticism and scrutiny from Congress and other market participants.
The US House Financial Services Committee and several lawmakers have raised concerns over Prometheum’s arrangement with the SEC due to its timing—just prior to Prometheum’s co-CEO testifying favorably for the SEC before Congress. The lack of transparency surrounding Prometheum’s approval has fueled controversy across the cryptocurrency industry.
Blumberg, a cryptocurrency investor and principal of Left Curve, LLC, was one of those critics, publicly questioning Prometheum’s regulatory standing, referring to its special purpose broker-dealer (SPBD) license as a “sweetheart deal” from the SEC. He further alleged that the company operated an “unlawful unregistered commodities exchange,” sparking Prometheum’s legal action.
Blumberg Denies Defamation Charges
In a motion to dismiss the case filed yesterday, Blumberg contends that his comments were opinions, not statements of fact, and are therefore protected under New York’s anti-SLAPP laws. These laws are designed to shield individuals from lawsuits aimed at silencing public discussion on matters of significant public interest.
Blumberg’s legal team emphasized that Prometheum’s SPBD license and regulatory conduct have been the subject of ongoing political and public debate:
There is no defamation here. Prometheum’s operations and its relationship with the SEC are unresolved issues, heavily scrutinized by Congress and industry participants alike.
Using this line of defense, rather than the truth defense, means that a judge will have to decide whether Blumberg’s comments were him expressing his opinion or if he was stating facts as he saw them.
Prometheum, meanwhile, denies any wrongdoing and asserts its compliance with existing laws, accusing Blumberg, who has less than 1,000 followers on X, of knowingly spreading falsehoods to harm its reputation.
