U.S. Senator Tommy Tuberville of Alabama and Congressman Blaine Luetkemeyer are calling on Attorney General Merrick Garland and Securities and Exchange Commission (SEC) Chairman Gary Gensler to remove Prometheum, Inc.
In a letter dated July 10, 2023, Tuberville and Luetkemeyer raised concerns about discrepancies in statements by digital asset firm Prometheum, in congressional testimony, and in SEC filings. They highlighted that Aaron Kaplan, co-CEO and founder of Prometheum, testified before Congress that the company began independent development of its technology platform in December 2019, separate from its China-based partners. This claim, lawmakers argue, contradicts indications in Prometheum’s financial statements and SEC filings.
According to the letter, Prometheum continued to rely on its partnership with Shanghai Wanxiang Blockchain, Inc. (Wanxiang) and its subsidiary HashKey Digital Asset Group, Ltd. — both China-based entities with ties to the Chinese Communist Party — long after Kaplan said the company had begun independent operations.
The legislators wrote:
“Prometheum’s audited financial statements and SEC filings in 2020 and 2021, which investors have relied on, indicate that Prometheum continued to rely on its partnership with Wanxiang and HashKey beyond December 2019.”
The representatives stressed that Prometheum highlighted its relationship with Wanxiang in its SEC filings and public appearances, potentially misleading investors into believing the relationship continued and was beneficial. They argue that Kaplan’s testimony before Congress appears to conflict with these documents.
“Making false statements to Congress is a crime. Filing false or misleading statements in SEC filings constitutes securities fraud,” the lawmakers stressed, urging a thorough review of Prometheum’s statements, continued membership in the Financial Industry Regulatory Authority (FINRA) and registration with the SEC.
Prometheum, a New York-based company, recently became the first crypto-focused company to register with the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) as a special-purpose broker-dealer. This is an important development in the crypto industry as it indicates possible avenues to regulatory approval for other crypto companies looking to use digital assets.
However, Prometheum has sparked speculation and criticism since Kaplan’s congressional testimony; as a relatively unknown player at the start of the year, its ability to gain SEC clearance where others have failed has raised questions.
The post U.S. Lawmakers Call on DOJ, SEC to Investigate Prometheum, Citing Suspicions of “False Testimony” and Securities Law Violations, first appeared on CryptoSlate.
