SEC's Gary Gensler and FINRA's Robert Cook have until August 22nd to respond to US lawmakers' request for information.
The House Financial Services Committee, a significant legislative entity in the United States, has raised eyebrows and questions over the granting of a unique broker-dealer license to Prometheum.
House Committee Chair Patrick McHenry, along with two dozen committee members, expressed their concerns through letters addressed to both SEC Chair Gary Gensler and FINRA CEO Robert Cook on August 9th.
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Their primary concern revolved around the “timing and circumstances” that led to Prometheum securing a special purpose broker-dealer (SPBD) license, especially when the government aims to bridge regulatory gaps concerning digital assets.
In a pointed critique, the committee members highlighted:
While Prometheum claims it is the silver bullet for regulated digital asset offerings, it has not yet served a single customer. It is unclear why FINRA would have chosen to approve a firm with no operating history and no track record of serving customers over all the applications that it has received.
It is worth noting that the House committee set an August 22nd deadline for the SEC and FINRA to produce all relevant documents and correspondence regarding the licensing of Prometheum.
Interestingly, since its launch in 2017, Prometheum was under the radar in the cryptocurrency domain until June 2023. The spotlight only shifted their way when its co-founder and co-CEO Aaron Kaplan gave his testimony before the House committee in June.
Following its SPBD license acquisition in May, questions mushroomed from crypto advocates and legislators, with some even pressing for an in-depth examination of its operations.
The unfolding scenario, with the House Financial Services Committee's intense scrutiny of Prometheum's license acquisition, exemplifies the delicate balance between fostering innovation in the cryptocurrency domain and ensuring robust regulatory oversight. The ensuing weeks promise to bring clarity to the questions posed by the committee, establishing a precedent for future dealings.
