Prometheum Comments on CCP Affiliation Question from House Financial Services Committee Republicans

Yesterday, Republicans on the House Financial Services Committee revealed a letter sent to both the Chair of the SEC, Gary Gensler, and the President of FINRA, Robert Cook. The letter was addressing the relationship with Prometheum, a broker-dealer that aims to provide digital asset services.

Prometheum is the first, and only Special Purpose Broker-Dealer (SPBD) approved to offer digital asset security services. The letter questioned the timing of the approval in relationship to a hearing held by the Committee, which is seeking to provide bright-line rules for digital assets – which may not be securities. Prometheum was approved as an SPBD in May – a couple of weeks prior to a hearing by the Committee on digital assets, which took place on June 13, 2023. One of the witnesses was Prometheum CEO, Aaron Kaplan. Comprehensive legislation regarding digital assets was revealed on June 2, 2023.

As part of the letter from Committee members, a question was raised regarding an investor’s relationship with the firm and the relationship with the Chinese Communist Party (CCP). At one point, Prometheum was working with a Chinese blockchain firm called Wanxiang. As well the letter stated that a Chinese individual was an investor in Prometheum.

Today, CI has received a response to the Republican members’ statement. A representative for Prometheum stated:

“Prometheum was subject to an SEC investigation in which it provided communications, financials, and other materials regarding Prometheum’s former relationship with Wanxiang and its affiliates. The SEC closed this investigation on June 21, 2023. Prometheum was also subject to an informal CFIUS review of its relationship with Wanxiang. As of today, CFIUS has not opened a formal investigation against Prometheum. CFIUS has the authority to require divestiture should there be a threat to national security. 

Prometheum took an initial investment from HashKey Digital Asset Group Ltd., a subsidiary of Shanghai Wanxiang Blockchain Inc., at the end of 2018. Thereafter, it became clear to Prometheum that joint development was not viable. Upon such realization, Prometheum started to independently develop its own platform. Prometheum formally terminated all co-development work and strategic relationships with Shanghai Wanxiang Blockchain and its affiliates in October 2021 in an Omnibus Agreement, which was filed with the SEC in November 2021.

Prometheum is proud to be an American-born, bred, and controlled company and holds the security of customer funds and information as its top priority.”

The spokesperson also referenced the prepared testimony provided for the aforementioned hearing, which addressed the CFIUS request.


Register Now to Attend
Sponsored Links by DQ Promote

 

 

Send this to a friend