Patrick T. McHenry, the Chairman of the United States House Financial Services Committee has asked that the United States Securities and Exchange Commission (SEC) chief Gary Gensler hand over the paperwork that needed to do with Prometheum’s licensing.
According to the letter despatched by McHenry to Gensler,
“The approval comes as the Committee is considering addressing gaps in the regulation of digital assets.”
#NEW: Chairman @PatrickMcHenry led Republicans on the Financial Services Committee in letters to @FINRA and @SECGov concerning the shady approval of Prometheum as the one Special Purpose Broker-Dealer for digital belongings.
👇 Read extra 🔗https://t.co/2B9TYw070h pic.twitter.com/8erscG99JO
— Financial Services GOP (@FinancialCmte) August 15, 2023
Prometheum Licensing: an SEC Affair
In context, the crypto-related agency was granted approval for a particular dealer license in May by the Financial Industry Regulatory Authority (FINRA) below the purview of the SEC. The license permits Prometheum to supply custody companies for digital asset securities.
However, the approval has raised severe issues within the cryptocurrency ecosystem and amongst lawmakers.
The SEC’s approval got here shortly after the regulator levied enforcement actions in opposition to prime cryptocurrency exchanges Binance and Coinbase. Crypto neighborhood members raised brows at the truth that a far less-recognized crypto agency acquired such a license from the regulator. Notably, Prometheum doesn’t provide buying and selling in prime crypto belongings like Bitcoin (BTC) and Ethereum (ETH).
Some Republican lawmakers who’ve been weary of the actions of the SEC challenged the timing of the license, citing that it “raises serious questions” particularly as they have been nonetheless busy engaged on regulation for the crypto trade. The approval got here just a few weeks after Republicans within the U.S. Congress introduced a brand new draft Bill to reclassify digital tokens from securities to commodities.
Republicans Suspects Foul Play
During the U.S. House Financial Services Committee hearing which was held in mid-June, Prometheum’s Chief Executive Officer (CEO) Aaron Kaplan was allowed to face as a witness within the listening to. Again, this motion raised issues. This compelled Representative Mike Flood to tag the Prometheum approval from FINRA and SEC as ‘nonsense’.
Prometheum’s co-CEO mentioned that the best way ahead for the crypto trade is thru the present regulatory framework designed by the SEC. It sounded extra like a political battle when the crypto neighborhood identified that Kaplan was solely studying a pre-written observe with narratives from Democratic members of Congress or the markets regulator.
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