Recent testimony by the co-founder and co-CEO of Prometheum, Aaron Kaplan, has garnered the crypto community’s attention. On June 13, Kaplan testified before the U.S. House while discussing crypto regulations. Interestingly, Kaplan’s testimony contradicted recent remarks from key figures in the cryptocurrency business, such as Coinbase. Kaplan seems to be in favor of regulating crypto under existing securities regulations.
Kaplan argued that the SEC has clearly laid out the framework for crypto businesses to abide by. He went as far as calling the SEC “the most capable financial markets regulatory agency in the world.”
Kaplan asserted that the SEC must regulate cryptocurrency exchanges and custodians. In addition, he described companies that are not currently regulated as “reckless, unlawful platforms.”
He continued by stating that cryptocurrencies are subject to all applicable securities rules and regulations. Furthermore, individuals who support additional legislation specifically related to crypto are “simply not willing to comply.” He also stated that new laws are “not in the best interest of the investing public or the blockchain industry.” However, as much as people questioned Kaplan’s arguments, many were curious about who he was and what his firm, Prometheum, was involved with.
What is Prometheum’s role in crypto?
Aaron and Benjamin Kaplan, the company’s co-CEOs, created the Wall Street-based firm in 2017. The two are also attorneys with the Gusrae Kaplan legal company, specializing in financial services. The company’s subsidiaries are notable for obtaining permission from the Financial Industry Regulatory Authority (FINRA) and the SEC.
During the June 13 hearing, Representative Mike Flood questioned Kaplan about whether Prometheum provided trading for Bitcoin (BTC) or Ethereum (ETH). In response, Kaplan confirmed they did not.
Matt Walsh, a Castle Island Ventures partner, pointed out that Prometheum got “approval for a first-of-its-kind Special Purpose Broker-Dealer (SPBD) for digital asset securities,” while the SEC was bringing cases on Coinbase and Gemini. Walsh said that the facts surrounding the firm are “bizarre.”
Walsh also pointed out that Prometheum believed all layer-1s are securities. Moreover, he pointed out that Prometheum also has its own chain and token. Rumors about the firm are making the rounds on social media. Some claim that the business may have links to the Chinese Communist Party. They cited Prometheum’s 2019 SEC filings, which state that HashKey and Shanghai Wanxiang Blockchain are “strategic partners and joint ventures.” Others have mentioned that the team at Prometheum comprises former employees of the SEC and FINRA. Regardless, the firm does seem to have some fishy elements, which has caused a stir in the crypto community.