Republicans Blast SEC For ‘Shady’ Prometheum Broker Approval

Republicans on the Home Monetary Providers Committee (HFSC) are calling out the U.S. Securities and Change Fee (SEC) for its “shady approval” of the mysterious crypto dealer Prometheum.

Led by Committee chair Patrick McHenry (R-NC), the politicians say that the “timing” of the approval “raises critical questions”—particularly given the state of crypto regulation in the US at giant.

“The timing of the approval raises considerations that it was geared toward demonstrating that laws will not be wanted as a result of there’s a workable regulatory framework for the custody of digital asset securities,” wrote the HFSC in a letter to the SEC final week, which was launched on Tuesday.

On Could 17, the Monetary Business Regulatory Authority (FINRA) accredited Prometheum because the first-ever Particular Function Dealer-Vendor (SPBD) for digital belongings. This came to visit two years after the regulatory regime was first established in December 2020, throughout which no different crypto change might handle to safe approval below the framework.

It additionally occurred in the identical month that the HFSC held hearings associated to digital asset laws geared toward drawing clear traces round which crypto belongings the SEC would have jurisdiction over.

SEC chairman Gary Gensler has usually claimed that securities legal guidelines are clear of their present type and that non-compliant crypto corporations are deliberately selecting to not observe the legislation.

In truth, because the HFSC factors out, Gensler has touted Prometheum’s approval as proof that there’s a clear pathway for current corporations to come back into compliance. Prometheum co-founder and co-CEO Aaron Kaplan did the identical throughout testimony earlier than Congress in June.

“Whereas Prometheum claims it’s the silver bullet for regulated digital asset choices, it has not but served a single buyer,” argued the HFSC. “It has additionally refused to make public the digital asset securities that Prometheum ATS would assist on its platform.”

The letter famous that it was “unclear” why FINRA—which is supervised by the SEC—would approve a agency “with no working historical past” earlier than all different candidates. It additionally stated that the approval raised nationwide safety considerations, provided that Prometheum is 20% owned by Wanxian, which “has deep ties to the Chinese language Communist Get together (CCP).”

The Committee requested that the SEC and FINRA present all paperwork and communications associated to Prometheum’s approval by August 22 at 5 pm – one week from in the present day.