Prometheum, a crypto startup, has gained attention from the Securities and Exchange Commission (SEC) as an example of regulatory compliance in the industry. The company positions itself as a market ecosystem for digital asset securities and is the first crypto-centric broker-dealer to register with the SEC and be a member of the Financial Industry Regulatory Authority (FINRA). Prometheum's founder and co-CEO, Aaron Kaplan, testified before the House Financial Services Committee, emphasizing the company's commitment to compliance and criticizing new legislation aimed at regulating crypto. While some industry players questioned Prometheum's preferential treatment, Kaplan stated that the regulatory status was the result of years of hard work.

The success of Prometheum aligns with SEC Chair Gary Gensler's assertion that noncompliance is a choice, as Republican lawmakers continue to criticize the SEC's actions against other crypto entities. However, during the hearing, Prometheum faced criticism for not allowing customers to trade Bitcoin and Ethereum, with Kaplan explaining that the company is taking a gradual approach. The lack of transparency regarding the assets it intends to list on its platform has raised further concerns.

Prometheum has faced scrutiny on social media, with critics questioning its business model and connections to China-affiliated firms. Some argue that the SEC's approval of Prometheum raises red flags, considering the lack of product launches since the company's inception and its ties to regulated entities.

Prometheum's registrations as an alternative trading system (ATS) and special purpose broker-dealer (SPBD) can be verified on FINRA's BrokerCheck platform. While the ATS is approved for operation in multiple jurisdictions, the SPBD business is limited to 15 states, including New York, known for its strict BitLicense regime. Questions have been raised about Prometheum's ability to register with the SEC, prompting a request under the Freedom of Information Act for related documents and communications.

As the industry and Crypto Twitter delve deeper into Prometheum's background, advocates for the crypto industry await the SEC's response to the FOIA request, hoping for greater transparency.

https://brokercheck.finra.org/firm/summary/311636

https://www.dfs.ny.gov/virtual_currency_businesses

https://twitter.com/tyler/status/1669332864398409728