The SEC’s Approval of Prometheum Raises Concerns
The U.S. Securities and Exchange Commission (SEC) is facing scrutiny from the House Financial Services Committee (HFSC) over its approval of Prometheum, a crypto broker. Committee chair Patrick McHenry and other Republicans have labeled the approval as “shady” and are questioning the timing of the decision in the context of cryptocurrency regulation in the United States.
- FINRA, supervised by the SEC, approved Prometheum as the first-ever Special Purpose Broker-Dealer (SPBD) for digital assets.
- No other cryptocurrency exchange received approval under the regulatory framework established in 2020, raising eyebrows among HFSC members.
- The HFSC suggests that the timing of the approval was strategically designed to show that existing legislation is adequate and a new regulatory framework isn’t necessary.
- Prometheum has not yet catered to a single customer, according to the HFSC, and has been non-transparent about its planned digital asset securities.
- Prometheum’s ownership structure, with a 20% stake owned by international conglomerate Wanxiang, raises national security concerns, as Wanxiang has connections to the Chinese Communist Party.
The HFSC is demanding transparency and clarity from the SEC and FINRA, urging them to disclose all documents and communications related to Prometheum’s approval.
Hot Take:
The approval of Prometheum by the SEC has sparked controversy and raised questions about the agency’s decision-making process. The timing of the approval, the lack of transparency from Prometheum, and the ownership structure have all contributed to the concerns expressed by the House Financial Services Committee. As the situation unfolds, it is clear that the HFSC is pushing for greater transparency and accountability from the SEC and FINRA.
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