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The American cryptocurrency lobby group Blockchain Association has filed a complaint with the US Securities and Exchange Commission, asking for information about the previously little-known cryptocurrency company Prometheum.
The company was thrust into the spotlight of the crypto industry this week when its CEO, Aaron Kaplan, testified at a House of Representatives hearing and supported the regulation of cryptocurrencies under securities laws and the SEC, in stark contrast to other vocal industry advocates.
On June 15, Blockchain Association advisor Marissa Koppel stated that the group had filed a Freedom of Information Act (FOIA) request with the SEC to obtain documents and communications related to Prometheum.
In a series of tweets, Koppel said she was “suspicious” that Prometheum was approved as a Special Purpose Broker-Dealer (SPBD) for digital assets “in the midst of aggressive SEC enforcement.”
Koppel was also skeptical about how Kaplan was able to testify at a congressional hearing on industry rules.
2/ The CEO somehow gets a seat in front of Congress and argues that Prometheum represents the compliant path for digital assets.
And they’ve paid $1.5+ million in sales commissions to a Chinese-affiliated entity with quite the regulatory track record.
— Marisa Tashman Coppel (@MTCoppel) June 15, 2023
FOIA requests are submissions by members of the public to U.S. federal agencies that can request records on any topic, in this case SEC information about Prometheum.
At a House hearing on June 13, Kaplan said his firm did not receive any “further benefits from the Securities and Exchange Commission” in the interrogation of Representative Mike Flood.
Flood explicitly lays out why Prometheum’s claims that their SPBD approval is evidence of a… pic.twitter.com/yCDDKHiLea
— Alexander Grieve (@AlexanderGrieve) June 13, 2023
Former SEC and FINRA Officer
Meanwhile, others have expressed suspicion about the Prometheum team’s past, noting that some of them are former employees of the SEC and the Financial Industry Regulatory Authority (FINRA).
Prometheum Chief Compliance Officer Joseph Zangri was an SEC lawyer in the mid to late 1990s. In addition, in May 2021, Rosemary Fanelli, the company’s chief regulator, joined the company after nearly 14 years in senior positions at FINRA, the U.S. securities industry’s self-regulatory organization.
Prometheum’s co-founders and co-CEOs Aaron and Benjamin Kaplan are also slightly separated from former SEC employees. The Kaplans are lawyers for the law firm Gusrae Kaplan, which claims it was created by “the former chief prosecutor of the U.S. Securities and Exchange Commission’s Enforcement Division.”
Who look alot like these guys: https://t.co/MPQjKH0GbL pic.twitter.com/bcu4sgcv7s
— Matt Walsh (@MattWalshInBos) June 14, 2023
Gusrae Kaplan co-founder Martin H. Kaplan is also the chairman of Prometheum.
However, it is not uncommon for crypto companies to hire former regulators.
After a lawsuit from the SEC Binance. The US has hired former SEC co-director George Kanellos as a lawyer. The newly appointed general counsel for stablecoin issuer Circle has experience in many government positions, including the US Treasury and the Commodity Futures Trading Commission.