Washington, D.C. (July 12, 2023) – Today, Blockchain Association submitted a letter to the Securities and Exchange Commission’s (SEC) Office of Inspector General (OIG) requesting the OIG open an investigation into potential impropriety surrounding the approval of Prometheum Ember Capital (Prometheum) as a first-of-its-kind Special Purpose Broker-Dealer (SPBD) as well as the means by which Prometheum’s co-CEO, Aaron Kaplan, secured a seat to testify before the U.S. House Financial Services Committee in June.
Despite lacking a working product and clear plans to list digital assets, Prometheum obtained a SPBD license from the Financial Industry Regulatory Authority (FINRA) in May 2023. The license approval comes in the midst of SEC hostility toward the digital asset industry and at a time when other companies with legitimate business models have had their license applications denied or significantly delayed. Prometheum’s public position on the need for guidance from the SEC in the area of digital asset securities regulation also shifted over time.
There are also concerns about SEC Chair Gary Gensler’s potential use of Prometheum and the SPBD licensure process to obstruct congressional efforts towards legislation. By spreading a false narrative that the law is already clear regarding digital asset securities, Chair Gensler may hinder necessary legislative developments and undermine market confidence. Since Prometheum’s licensure approval, it has been parroting a similar narrative. These facts raise questions as to whether Prometheum received favorable regulatory treatment stemming from undue influence by the SEC.
Blockchain Association has also submitted a Freedom of Information Act request to the SEC to obtain relevant documents and communications related to this matter.
The following statement is attributed to Kristin Smith, Blockchain Association CEO:
“While Congress is taking steps to provide guidance and answers to the American digital assets industry, Chair Gensler’s SEC continues to stand in the way by spreading a false narrative that the laws are already clear. The facts surrounding Prometheum’s SPBD licensure process raise questions as to the SEC’s involvement in offering Prometheum favorable regulatory treatment in the midst of hostility toward the digital asset industry. To better understand whether any impropriety existed during Prometheum’s licensure process, we urge the SEC OIG to initiate a thorough investigation. Blockchain Association — and the entire industry — eagerly awaits clarity and simply asks for a level playing field that ensures fair treatment for all participants.”
Please find the entire letter here.