- A US Senator has added his voice to calls for the Prometheum-SEC deal to be investigated
- Ritchie Torres called the awarding of Prometheum’s license a “backroom deal” that needed looking into
- The Blockchain Association has already written to the SEC over the matter this week
Calls to investigate crypto platform Prometheum have gathered strength after Representative Ritchie Torres, a Democrat from New York, formally requested that the Securities and Exchange Commission (SEC) initiate an investigation regarding the circumstances surrounding the issuance of its special purpose broker-dealer (SPBD) license. In a letter directed to SEC Inspector General Deborah Jeffrey, Torres urged the agency to scrutinize the “unconventional arrangement” that led to Prometheum obtaining this unique privilege, which remains unprecedented among other crypto exchanges.
Pressure Growing on SEC
Pressure has been growing on the SEC to reveal the truth about its deal with Prometheum which saw it granted the SPBD license five years after it first applied and without having actually begun operation. CEO Aaron Kaplan also managed to gain a seat at a House Financial Services Committee just weeks later, where he defended the SEC’s approach to crypto regulation.
As a result of this rather odd and certainly unique set of circumstances, the Blockchain Association this week wrote to the SEC urging it to “open an investigation into potential impropriety by the Securities and Exchange Commission … and its approval of Prometheum Ember Capital … as a first-of-its-kind Special Purpose Broker-Dealer” as well as investigating how Kaplan secured his seat.
Torres Calls for Answers
The association’s claims now have added weight after Senator Torres did the same and wrote to SEC Inspector General Deborah Jeffrey, where he asked for the “unusual backroom deal” to be looked into:
Prometheum appears to be nothing more than a Potemkin platform, operating as a timely talking point for crypto critics rather than a true trading platform for crypto customers. The dubious decision to license a deceptive digital assets platform reflects the latest attempt by Chair Gary Gensler to politicize the registration process to an extent seldom seen in the SEC’s history.
Torres referenced his letter in a tweet where he again summarized his thoughts on the SEC’s behavior:
🚨 @SECGov is acting like an overzealous traffic cop arbitrarily ticketing drivers while keeping the speed limit a secret.
It prefers to communicate by enforcement rather than by rules or guidance. But that’s no way to regulate digital assets.
I’m calling for an investigation. https://t.co/ZbiSk6oQ9F pic.twitter.com/n0hijAREDC
— Rep. Ritchie Torres (@RepRitchie) July 13, 2023
Hopefully, the pressure now being placed on the agency, with the added attention from its loss in the Ripple case, will push the agency to reveal the truth of the Prometheus deal.
