The regulatory trajectory in the digital currency ecosystem might have gotten more complicated following the testimony of Aaron Kaplan, co-founder of under-the-radar crypto firm Prometheum. Besides being a relatively unknown player in the crypto industry, the Prometheum CEO appears to be aligned with the United States Securities and Exchange Commission (SEC) on the path toward the regulation of the industry.
Prometheum's stance is clear: There is a path forward for digital assets in the U.S. through the current regulatory frameworks set up by federal securities laws. Hear Aaron Kaplan's testimony in front of the House Financial Committee here: https://t.co/qqVd0ryqe2#digitalassets— Prometheum (@PrometheumInc) June 14, 2023
Kaplan's testimony and the controversy
In his recent testimony before the United States House Committee, Kaplan supported crypto regulation based on the current provisions of the Exchange Act, just like the SEC. Over the past few years, leaders in the industry have called on both Congress and the SEC to provide a more tailored regulatory framework for players in the nascent ecosystem.
The calls have yielded no fruit to date, with a spate of regulatory actions introduced against the likes of Coinbase, Kraken and Binance exchanges, among others. At a time when the controversy over crypto regulation is higher, Kaplan said the SEC has "clearly laid out" a "compliant path forward for crypto in the United States."
While this claim is contrary to popular opinion in the industry, stakeholders believed Kaplan did the unthinkable by commending the market regulator for being "the most capable financial markets regulatory agency in the world."
Community reaction: scent of hidden agenda
The sheer convenience of the testimony and the timing has been flagged by industry experts, many of whom have started digging into the Prometheum brand.
The firm was established in 2017, and it is known as one of the few firms that is fully compliant with the SEC's registration provisions. Last October, Prometheum launched an SEC-registered trading outfit, a move that many crypto market players have been unable to accomplish for some time.
Market expert Matt Walsh remains curious after sharing key facts about the company on how a firm with no known business model can be held up by the SEC as the standard of compliance for the entire industry.
What is going on here? Bizarre that this fringe player with no biz model is being held up as an example of compliance by the SEC when the actual businesses in the United States can’t get a fair shot. An SEC PSYOP to have the Dems oppose McHenry-Thompson market structure bill?— Matt Walsh (@MattWalshInBos) June 14, 2023