Cryptocurrency NewsU.S. legislators question SEC and FINRA regarding Prometheum's broker-dealer endorsement.

U.S. legislators question SEC and FINRA regarding Prometheum’s broker-dealer endorsement.

On the House Financial Services Committee, lawmakers probed into the conditions surrounding FINRA’s greenlighting of Prometheum’s unique broker-dealer license in May. The committee, including its Chair, Patrick McHenry, and 20 other members, sent distinct letters on August 9th to both the SEC’s Chair, Gary Gensler, and FINRA’s CEO, Robert Cook. The correspondence highlighted their concerns over FINRA’s decision-making process in relation to Prometheum’s license, especially amidst ongoing discussions about digital asset regulatory gaps.

Though Prometheum markets itself as a pivotal solution for regulated digital asset transactions, the lawmakers pointed out that the firm hasn’t catered to a single client. They expressed surprise at FINRA’s decision to approve a company that’s new and has no established reputation over many other applicants.

Prometheum’s journey into the limelight began when its co-CEO, Aaron Kaplan, gave testimony to the House committee in June. Having been established in 2017, the company remained relatively obscure within the cryptocurrency community until it obtained the SPBD license this past May. This event triggered numerous inquiries from both crypto proponents and legislators, some even advocating for an in-depth inquiry into the firm’s offerings.

The committee has set an August 22nd deadline for the SEC and FINRA to furnish all communications and documents associated with Prometheum’s license. Furthermore, suspicions of Prometheum’s potential affiliations with the Chinese Communist Party have led the lawmakers to request specific clarifications from FINRA on this matter.

Reacting to these concerns, a representative from Prometheum informed Cointelegraph that the SEC has concluded its probe into the firm’s past association with Shanghai Wanxiang Blockchain and the alleged connections to the CCP. Additionally, Kaplan had earlier refuted similar suspicions raised by lawmakers in July about the company’s operations.


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