‘Who the hell’ is Prometheum and what did it say to Congress about SEC compliance?

Posted on June 15, 2023

[ad_1]

The relatively under-the-radar crypto company Prometheum has been thrust into the spotlight after the recent testimony of its co-founder before the United States House of Representatives Committee, discussing the clarity of crypto regulations.

On June 13, Prometheum founder and co-CEO Aaron Kaplan appeared before the US House of Representatives at a hearing to discuss providing regulatory clarity for the crypto industry.

Contrary to recent comments from crypto industry players such as Coinbase, Kaplan’s testimony appears to support the regulation of crypto under current securities laws – a view shared by United States securities regulators.

Attention has also been drawn to Kaplan and Prometheum’s testimony on social media, including Twitter which was widely shared on June 14 thread from Castle Island Ventures partner Matt Walsh, who shares what he claims are “weird” facts about the company and its co-founder.

The thread has also prompted many people — including Cardano and Ethereum co-founder Charles Hoskinson — to ask who Kaplan and Prometheum are, and why they seem so unheard of.

Wall Street-based Prometheum was co-founded in 2017 by Aaron and Benjamin Kaplan, the company’s co-CEO. The couple are also registered lawyers at the financial services-focused law firm Gusrae Kaplan.

The company’s subsidiaries are notable for their registration with the SEC and approval from the Financial Industry Regulatory Authority (FINRA).

In May, Prometheum subsidiary Ember Capital was the first company to offer digital asset custody as a qualified custodian after receiving FINRA approval to operate as a special purpose intermediary agency (SPBD) for digital assets.

In October 2022, its subsidiary Prometheum Ember ATS launched an SEC-registered alternative trading system (ATS) that offers trading, clearing, settlement and custody of digital assets.

What did Kaplan say?

In his prepared testimony, Kaplan argued that multiple frameworks provided by the SEC had “clearly defined” an “appropriate pathway for crypto in the United States.”

He even gave the regulator a glowing review, calling it “the most capable financial market regulatory body in the world.”

Kaplan claims crypto exchanges and custodians “should be regulated by the SEC” and blasts those that are not currently regulated as “reckless and unlawful platforms.”

He went on to say existing securities laws and regulations apply to cryptocurrencies and those debating new crypto-specific laws “don’t want to comply.” He added the new law “is not in the best interest of the public investors or the blockchain industry.”

Related: The Crypto Industry is ‘destined’ to focus on BTC because of the regulator: Michael Saylor

However, some have criticized the crypto company, saying Prometheum doesn’t have much to show for it product-wise despite years in business and regulatory approvals.

During the trial, Kaplan was asked by Representative Mike Flood at the trial whether Prometheum was offering trading for Bitcoin (BTC) or Ether (ETH) which together make up nearly 65% ​​of the $1 trillion crypto market cap according to CoinGecko.

Kaplan answered both questions by saying no.

Claim ‘Bize’

Meanwhile, conspiracy theories are rife on social media, with some alleging the company’s ties to the Chinese Communist Party, pointing to a 2019 SEC filing from Prometheum that states HashKey and Shanghai Wanxiang Blockchain are “strategic partners and joint ventures.”

Others have taper to the Prometheum team which includes former SEC and FINRA staff.

Cointelegraph has reached out to Prometheum for comment around some of these claims.

Father of DeFi, Hall of Fire: Ethereum is ‘highly underrated’ but growing stronger