Blockchain Association. Requests information on Promethium over ‘questionable’ approval

United States crypto lobby group the Blockchain Association has filed a request with the US Securities and Exchange Commission, seeking information on formerly little-known crypto company Promethium.

The company became the focus of the crypto industry’s attention this week when its CEO, Aaron Kaplan, testified at a House hearing and voiced his support for crypto being regulated under the securities laws and the SEC, a position that has been echoed by other vocal supporters of the industry. is the opposite.

On June 15, Marisa Koppel, a lawyer for the Blockchain Association, said the group filed a Freedom of Information Act (FOIA) request with the SEC seeking documents and communications related to Promethium.

In a series of tweets, Coppell said she was “dubious” Promethium was approved as a special purpose broker-dealer (SPBD) for digital assets “amid aggressive SEC enforcement”.

Coppel was also skeptical about how Kaplan was able to testify at the Congressional hearings on industry regulations.

2/ The CEO somehow manages to get a seat in front of Congress and argues that Promethium represents a compliant path to digital assets.

And they’ve paid $1.5+ million in sales commissions to a Chinese-affiliated entity with a considerable regulatory track record.

Hmm

— Marissa Tushman Coppel (@MTCoppel) June 15, 2023

FOIA requests are submitted by members of the public to US federal agencies seeking records on any subject, in this case, the SEC’s information on Promethium.

In a June 13 House hearing, Kaplan said his firm did not receive “additional preemptive relief from the SEC” when questioned by Representative Mike Flood.

for those who didn’t stick till the end @FinancialCmte hearing today, this exchange between @USRepMikeFlood And @PrometheumInc CEO Aaron Kaplan is an absolute must-watch.

Flood explains clearly why Promethium claims that their SPBD approval is a proof… pic.twitter.com/yCDDKHiLea

— Alexander Grieve (@AlexanderGrieve) June 13, 2023

Former SEC and FINRA Employees

Meanwhile, others have raised Doubt the background of the Promethium team, given that some are former SEC and Financial Industry Regulatory Authority (FINRA) employees.

Joseph Jangri, Promethium’s chief compliance officer, was an SEC enforcement attorney in the mid to late 1990s. In addition, the company’s Chief Regulatory Officer, Rosemary Fanelli, joins the company in May 2021 after serving nearly 14 years in senior roles at FINRA – a self-regulatory organization for the US securities industry.

Promethium’s co-founders and co-CEOs — Aaron and Benjamin Kaplan — are also ex-SEC employees. The Kaplan couple are attorneys at the law firm Gusrey Kaplan. States America It was founded “by a former chief attorney in the SEC’s Division of Enforcement”.

who look like these people: pic.twitter.com/bcu4sgcv7s

— Matt Walsh (@MattWalshInBos) June 14, 2023

Martin H. Kaplan, co-founder of Gus Kaplan, is also the chairman of Promethium.

However, it is not common for crypto companies to hire former regulatory employees.

Following a lawsuit from the SEC, Binance.US hired former SEC Enforcement Co-Director Jorge Canelos as counsel. The newly appointed chief legal officer of stablecoin issuer Circle has an expanding portfolio of government roles, including with the US Treasury and the Commodity Futures Trading Commission.

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