U.S. lawmakers ask DOJ and SEC to investigate

Open Letter to Attorney General and SEC Chairman

U.S. Senator Tommy Tuberville, along with five members of the U.S. Senate, sent an open letter to Attorney General Merrick Garland and Securities and Exchange Commission (SEC) Chairman Gary Gensler on the 10th, urging cryptocurrency companies to Requested to investigate “Prometheum”. Tuberville lawmakers allege co-CEO Aaron Kaplan may have given false testimony at hearings last month about the company’s close ties to Chinese companies. .

Prometheum is a cryptocurrency company registered with the SEC and the Financial Industry Regulatory Authority (FINRA). ) approval. This industry-first approval allows the company to act as a regulated custodian to provide custodial services for digital asset securities to individual and institutional investors.

connection:Prometheum becomes first U.S. regulator to become a custodian for digital asset securities

Co-CEO Kaplan testified before the House Financial Services Committee on June 13 about the future of digital assets. In the testimony submitted to the committee at that time, the company announced that the technology development partnership with China’s Wanxiang blockchain and its affiliated company HashKey, which started in December 2018, was announced in December 2019. , suggesting that it has started developing its own blockchain platform.

However, Rep. Tuberville pointed out that the company’s SEC filings in 2020 and 2021 documented the fact that Prometheum relied on the Chinese companies mentioned above. We quoted the following from the company’s year-end 2020 audited financial statements:

The document also stated that if Prometheum were to lose access to Wanxiang’s services, it would be difficult to find a replacement, which “could have a serious impact on the company’s business and financial condition.” It was written down.

Furthermore, it has been pointed out that Hashkey and Wanxiang Blockchain were listed as strategic partners and joint ventures for joint development activities in the June 2021 recruitment notice submitted to the SEC.

Rep. Tuberville noted that Wanxiang Blockchain and Hashkey have many documents revealing their deep ties to the Chinese Communist Party. He warned that if any part of the Prometheum platform was built by a Chinese company, it would put US users’ sensitive data at risk.

The letter emphasizes that it is a crime to give false testimony before Congress, and that making false or misleading reports in filing with the SEC constitutes securities fraud.

Rebuttal of Prometheum

In early June, Rep. Tuberville contributed an opinion piece to The Wall Street Journal, saying that Prometheum, which has close ties to Chinese companies, received its first regulatory approval, “an American investor’s data.・It may threaten security and privacy.”

In response, Prometheum wrote in The Wall Street Journal that Mr. Tuberville was making claims based on “outdated information.”

Senator Tommy Tuberville falsely accused Prometheum of having ties to and being influenced by, the Chinese Communist Party. His allegations are specious and without any merit.

Here is our response in The Wall Street Journal. https://t.co/YVce0nrBf5

— Prometheum (@PrometheumInc) June 23, 2023

Kaplan explained that on October 21, 2021, the company officially ended all joint development work and strategic relationships with Wanxiang Blockchain and Hashkey. The company also stressed that it had severed all intellectual property and technology ties with Wanxiang, and that Wanxiang and its affiliates “have no access to any information that endangers the American public.”

He added that all details of the company’s relationship with Chinese companies have been disclosed to and reviewed by the SEC and the Foreign Investment in the United States.

Industry view

Prometheum takes the position that the current cryptocurrency regulatory framework is sufficiently clear.

Prometheum’s stance is clear: There is a path forward for digital assets in the US through the current regulatory frameworks set up by federal securities laws. Hear Aaron Kaplan’s testimony in front of the House Financial Committee here: https://t.co/qqVd0ryqe2#digitalassets

— Prometheum (@PrometheumInc) June 14, 2023

Kaplan argued that “exchanges and trading platforms that operate solely under state licenses” are out of compliance and could pose serious risks to clients, in obtaining SPBD’s approval. He argued that there is a way for the crypto industry to move forward in a compliant manner in the United States, and Prometheum will prove it.

Meanwhile, the crypto industry appears to be skeptical of Prometheum, which received the industry’s first SPBD approval from regulators.

This Prometheum storyline has got to be the strangest thing I have seen in awhile in this industry. Has anyone actually looked into this? Beyond bizarre…

— Matt Walsh (@MattWalshInBos) June 14, 2023

At the hearing, Mr. Kaplan testified that the SEC’s regulations are clear and no new legislation is needed, but he said there is a lack of regulatory clarity in 2021. The lawmaker’s question also revealed that Prometheum does not actually offer its customers to trade Bitcoin and Ethereum, which account for more than 60% of the cryptocurrency market, making the industry more suspicious of the company. It seems that

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