Republican members of Congress demand information on Prometheum approval from FINRA, SEC

Financial Services Republicans, led by Chairman Patrick McHenry (NC-10), are inquiring with regulatory agencies regarding the recent approval of Prometheum Ember Capital LLC as a distinct broker-dealer for digital assets. Their inquiries are directed toward the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).

A relatively unknown company at the beginning of 2023, Prometheum’s ability to secure SEC approval as a registered Special-Purpose Broker-Dealer has drawn scrutiny.

Questions have arisen about the context of Prometheum’s approval, especially since it came shortly after a joint hearing by the House Financial Services Committee and the House Agriculture Committee on digital assets. Some have wondered if the approval was intended to demonstrate the adequacy of existing regulations for the digital assets sector.

Prometheum’s past collaboration with Shanghai Wanxiang Blockchain Inc. to develop blockchain trading software has been noted. Although the collaboration ended, the involvement of a Chinese firm in Prometheum’s early days has been highlighted. Reports suggest that a Chinese entity owns a portion of Prometheum, and one of their representatives, Feng Ziao, is a Director at Prometheum. The connection between Wanxiang and the Chinese Communist Party (CCP) has been mentioned in relation to concerns about data privacy and national security.

Prometheum’s Co-CEO Aaron Kaplan’s recent statements have garnered attention on social media. His views, which align closely with the SEC’s stance, differ from many in the industry. Kaplan’s belief in the sufficiency of Federal Securities Laws for crypto regulation has been met with differing opinions, especially since Prometheum has previously emphasized the importance of clear regulations.

Prometheum’s leadership’s connections with regulatory bodies like FINRA and the SEC have been discussed. Crypto analyst Adam Cochran has suggested that these connections might have influenced Prometheum’s regulatory approvals.

Recent articles indicate that U.S. lawmakers, including Senator Tommy Tuberville and Members of Congress like Ralph Norman and Blaine Luetkemeyer, have called for investigations into Prometheum by the DOJ and the SEC. Differences between Prometheum’s statements and its SEC filings, particularly regarding its relationship with Wanxiang, are among the reasons cited for these calls.