How Prometheum Got SEC Approval
Republicans in the U.S. legislative panel in charge of the Securities and Exchange Commission (SEC) have asked SEC Chairman Gary Gensler to provide an explanation for the allegedly unusual approval given to Prometheum Inc. as a cryptocurrency broker-dealer.
This action comes in response to worries expressed by 23 members of the House Financial Services Committee, including its chairman Patrick McHenry (R-N.C.), who signed a letter raising doubts about how Prometheum, an obscure company, was able to get SEC registration as a special-purpose broker-dealer for digital assets. The selection process that resulted in Prometheum’s approval as well as the timing of this choice are of particular interest to the lawmakers.
The letter also expresses concerns that the timing of the clearance may be an effort to show that the legal framework for digital asset security custody already in place renders additional legislation not necessary. The senators have also written to the Financial Industry Regulatory Authority (FINRA), which oversees the SEC and is in charge of enforcing securities regulations.
Prometheum’s elevation by the SEC to serve as an example of Gensler’s position that crypto regulation doesn’t require additional legislation has been questioned in light of this development. The decision was taken as McHenry’s committee was getting ready to submit legislation regarding digital assets to the House.
Prometheum has defended its approach, stating that its technology aligns with federal securities laws and aims to establish a compliant digital asset securities marketplace that safeguards investors’ interests.
The situation has drawn the attention of various Republican and Democratic lawmakers, with Ritchie Torres (D-N.Y.) requesting an investigation of the SEC’s actions.
