SEC Could Be Probed for Prometheum ‘Backroom Deal’

Congressman Ritchie Torres has submitted a proper request to scrutinize the controversial connection between the Securities and Exchange Commission (SEC) and cryptocurrency platform Prometheum, marking the newest transfer within the authorized and political storm involving the SEC.

🚨 @SECGov is appearing like an overzealous visitors cop arbitrarily ticketing drivers whereas holding the pace restrict a secret.

It prefers to speak by enforcement somewhat than by guidelines or steering. But that is no strategy to regulate digital property.

I’m calling for an investigation. https://t.co/ZbiSk6oQ9F pic.twitter.com/n0hijAREDC

— Rep. Ritchie Torres (@RepRitchie) July 13, 2023

Torres dispatched letters on July 13 to the SEC’s Inspector General Deborah Jeffrey and the Government Accountability Office’s Comptroller General Gene Dodaro. He expressed frustration over the SEC’s lack of transparency in making use of securities legal guidelines to digital property, additional emphasizing the Commission’s use of enforcement over rulemaking or steering:

“The SEC is like an overzealous traffic agent who arbitrarily tickets drivers for speeding while keeping everyone endlessly guessing about the speeding limit. Regulation by enforcement is no way to regulate.”

Torres’ criticism is focused on the SEC’s choice in May to award a Special Purpose Broker-Dealer (SPBD) license to Prometheum. The crypto platform, established in 2017, has drawn skepticism as a consequence of its perceived operate as a political instrument somewhat than a professional buying and selling platform.

Co-founder of Prometheum, Aaron Kaplan, grew to become a controversial determine after endorsing the SEC’s present regulatory strategy throughout a congressional listening to in June. Kaplan’s help, coupled with swirling social media hypothesis over Prometheum’s doable hyperlinks to Chinese traders, has solely added to the rising debate surrounding the platform.

Marisa Tashman Coppel of the Blockchain Association submitted a request to the SEC on June 15, searching for readability on Prometheum, calling it “suspicious.”

2/ The CEO one way or the other will get a seat in entrance of Congress and argues that Prometheum represents the compliant path for digital property.

And they’ve paid $1.5+ million in gross sales commissions to a Chinese-affiliated entity with fairly the regulatory observe report.

Hmmm 🤔

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

A month later, a collective of U.S. lawmakers pushed the SEC to delve into the corporate’s alleged ties to the Chinese Communist Party.

As Torres rallies for an examination into the SEC’s course of for registering digital property platforms and its association with Prometheum, asking Jeffrey,

“Examine the SEC’s failure to create a rigorous but workable process for registering real-world digital assets platforms and to examine the unusual backroom deal that the SEC has brokered with Prometheum.”