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House Financial Services Committee queries SEC and FINRA over granting SPBD license to Prometheum Ember Capital LLC. Worries include security, alleged ties to the Chinese Communist Party, and lack of transparency in disclosing supported digital asset securities.
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US lawmakers are asking the SEC and FINRA why they gave a Special-Purpose Broker-Dealer (SPBD) license to Prometheum. Republicans from the House Financial Services Committee questioned Gary Gensler, the SEC’s Chair, and Robert Cook, FINRA’s CEO, about whether Prometheum is trustworthy. They wrote in a letter:
“Even though Prometheum says it’s the perfect solution for legal digital asset offers, it hasn’t actually helped any customers yet.”
Lawmakers Express Worries About Intent and Security
On August 15, a public statement revealed that Patrick McHenry, who leads the House Financial Services Committee, teamed up with 22 other representatives. They sent letters to the SEC and FINRA, asking why Prometheum got the go-ahead as an SPBD.
When a company gets approved as an SPBD, it’s allowed to take care of digital securities. After FINRA gives its approval, firms can buy, sell, and store digital asset securities.
The Committee is wondering why only Prometheum got the SPBD approval, even though it hasn’t served customers yet. They also point out that other crypto companies with customers are still waiting for approval.
The lawmakers are also concerned about national security, thinking that Prometheum’s links to the Chinese Communist Party could be risky. They want to know more about how Prometheum was approved and the potential security risks.
Prometheum’s Approval Sparks Controversy in the Industry
The committee asked Prometheum about how clear they are about their offerings. They were concerned that Prometheum didn’t want to share the details of the digital asset securities they would support on their platform.
On June 13, one of Prometheum’s founders, Aaron Kaplan, talked to a part of the US government about cryptocurrency rules. He said he supports the SEC using traditional securities laws for crypto.
Matt Walsh from Castle Island Ventures noticed something interesting. While the SEC was getting ready to take legal steps against Binance and Coinbase, Prometheum got SPBD approval on May 17. He said:
“Then, the CEO of Prometheum somehow talks to Congress recently and seems to be reading from a script, like they coordinated with some members of Congress or the SEC.”
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.