The timing of the approval raises concerns that it was aimed at demonstrating that legislation is not needed because there is a workable regulatory framework for the custody of digital asset securities, said House Financial Services Committee Chair Patrick McHenry (R-N.C.) and 22 other Republican lawmakers in a letter to the Securities and Exchange Commission (SEC). The letter, sent to SEC Chair Gary Gensler, questioned how the previously unknown firm Prometheum Inc. beat out other applicants to obtain the SEC registration as a special-purpose broker-dealer for digital assets, and also what determined the timing of that conclusion. The lawmakers also sent a letter to the head of the Financial Industry Regulatory Authority (FINRA) – an industry-funded group that sets and enforces securities standards under the SEC’s watch.
The letters raise serious questions about whether the SEC championed Prometheum as a poster firm to represent Gensler’s position that no new laws are needed to regulate and police crypto in the U.S., just as McHenry’s committee was about to send digital assets legislation to the House floor. Prometheum’s co-CEO Aaron Kaplan has argued that his firm will demonstrate the right way to build a crypto platform that’s compliant with current rules.
The lawmakers are just the latest to call for more information or investigations into the sudden Washington presence of Prometheum – a company that hasn’t yet done any trading. Other Republican members of the Senate and House have also pursued more scrutiny on the situation, and Ritchie Torres (D-N.Y.) – a Democrat on McHenry’s committee – has requested an investigation of the SEC.