Gensler and Prometheum SEC Approval Under Scrutiny by US House Committee

Members of the United States House Financial Services Committee have expressed apprehensions regarding Prometheum's special purpose broker-dealer (SPBD) license.

The Committee, led by Chair Patrick McHenry and supported by twenty other members, has conveyed their concerns to Gary Gensler, Chair of the Securities and Exchange Commission (SEC), and Robert Cook, President and CEO of the Financial Industry Regulatory Authority (FINRA).

The focus of their inquiries revolves around the approval process for Prometheum's SPBD license.

"The timing and circumstances surrounding the approval of Prometheum as the first SPBD raise serious questions. The approval comes as the Committee is considering addressing gaps in the regulation of digital assets."

The timing and circumstances of this approval have raised alarms among the Committee members.

They've pointed out that Prometheum, while positioning itself as a solution for regulated digital asset services, has yet to serve any customers.

This has led to questions about why FINRA granted Prometheum, a crypto platform without an operational history or customer track record, this license.

The Committee finds this particularly concerning given the ongoing discussions between the industry and lawmakers concerning cryptocurrency and digital asset regulation.

Although Prometheum was established in 2017, it only recently gained significant attention within the industry.

In June, Aaron Kaplan, co-founder and co-CEO, testified before the House committee after the company secured its SPBD license the previous month.

The license's issuance triggered skepticism within the crypto community and prompted calls for further investigation from both crypto advocacy groups and lawmakers.

In response to the concerns raised by the crypto community, the House Committee members have taken proactive steps.

They've requested the SEC and FINRA to provide pertinent documents and communication records associated with Prometheum's SPBD license by August 22nd.

The Committee has also urged FINRA to address specific queries related to Prometheum, including alleged connections to the Chinese Communist Party (CCP).

"According to SEC filings, a representative of that entity, Feng Ziao, serves as a Director in Prometheum. Wanxiang has deep ties to the Chinese Communist Party (CCP)."