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Relatively inconspicuous cryptocurrency company Prometheum has come into the spotlight following a recent speech by its co-founder before a U.S. House of Representatives committee discussing the clarity of cryptocurrency regulation.
On June 13, Prometheum founder and co-CEO Aaron Kaplan appeared before the US House of Representatives at a hearing to discuss bringing clarity to the regulation of the cryptocurrency industry.
Contrary to recent comments by cryptocurrency industry players such as Coinbase, Kaplan’s testimony appears to support the regulation of cryptocurrencies under current securities laws, a view also shared by the U.S. securities regulator.
This Prometheum storyline has got to be the strangest thing I have seen in awhile in this industry. Has anyone actually looked into this? Beyond bizarre…
— Matt Walsh (@MattWalshInBos) June 14, 2023
Attention was also drawn to social media testimony from Kaplan and Prometheum, including a widely shared June 14 Twitter thread by Castle Island Ventures partner Matt Walsh, who shared what he called “weird” facts about the company and its co-founder.
The topic has also prompted many, including Cardano and Ethereum co-founder Charles Hoskinson, to wonder who Kaplan and Prometheus are and why they seem unheard of before.
Who the hell are these Prometheum guys? https://t.co/PHuqVGStlS
— Charles Hoskinson (@IOHK_Charles) June 14, 2023
Wall Street-based Prometheum was founded in 2017 by Aaron and Benjamin Kaplan, the firm’s co-CEOs. The couple are also lawyers at Gusrae Kaplan, a law firm specializing in financial services.
The company’s subsidiaries are notable for their SEC registration and Financial Industry Regulatory Authority (FINRA) approval.
In May, Prometheum subsidiary Ember Capital became the first firm to offer custody of digital assets as a qualified custodian after receiving FINRA approval to operate as a Special Purpose Broker-Dealer (SPBD) for digital assets.
In October 2022, its subsidiary Prometheum Ember ATS launched an SEC-registered alternative trading system (ATS) offering digital asset trading, clearing, settlement and custody.
What did Kaplan say?
In his prepared testimony, Kaplan argued that several structures provided by the SEC “clearly set out” “an appropriate path forward for cryptocurrencies in the United States.”
He even gave an enthusiastic review of the regulator, calling it “the most competent agency for the regulation of financial markets in the world.”
Prometheum’s stance is clear: There is a path forward for digital assets in the US through the current regulatory frameworks set up by federal securities laws. Hear Aaron Kaplan’s testimony in front of the House Financial Committee here: https://t.co/qqVd0ryqe2#digitalassets
— Prometheum (@PrometheumInc) June 14, 2023
Kaplan stated that cryptocurrency exchanges and custodians “should be regulated by the SEC” and called those that are not currently regulated “reckless, illegal platforms.”
He went on to say that existing securities laws and regulations apply to cryptocurrencies, and those who advocate new laws regarding cryptocurrencies are “simply unwilling to abide by them.” He added that the new laws “do not serve the interests of investors or the blockchain industry.”
Related: Crypto industry ‘destined’ to focus on BTC due to regulators: Michael Saylor
However, some criticize the cryptocurrency firm, saying that Prometheum has nothing to show in terms of product despite years of experience and regulatory approvals.
During the hearing, spokesman Mike Flood asked Kaplan at the hearing if Prometheum offered trading in Bitcoin (BTC) or Ether (ETH), which together account for almost 65% of the $1 trillion cryptocurrency market cap, according to CoinGecko.
Kaplan answered both questions by saying that it was not.
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
Meanwhile, conspiracy theories are rampant on social media, with some claiming the firm is linked to the Chinese Communist Party, pointing to 2019 Prometheum SEC filings that state HashKey and Shanghai Wanxiang Blockchain are “strategic partners and joint ventures.” .
Others pointed to the Prometheum team, which includes former SEC and FINRA employees.
Cointelegraph has reached out to Prometheum to comment on some of these claims.
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