April 19, 2024
Latest Cryptocurrency News

Senator Tuberville Calls for Investigation into Cryptocurrency Broker Prometheum

US Senator Thomas Tuberville (R-Ala.) penned an open letter to Attorney General Merrick Garland and Securities and Exchange Commission (SEC) Chair Gary Gensler on Monday, urging them to conduct an investigation into Prometheum, a special-purpose broker that recently obtained federal permissions to offer cryptocurrency trading services. In the open letter, Tuberville asserted that Prometheum might have provided false testimony to Congress or violated US securities laws.

Tuberville highlighted an alleged inconsistency between Prometheum CEO Aaron Kaplan’s statements to Congress and the company’s SEC filings. According to Tuberville, Kaplan claimed that Prometheum had independently developed its own blockchain platform since December 2019. However, SEC filings from 2021 indicated that Prometheum relied on Shanghai Wanxiang Blockchain, Inc., a Chinese company Tuberville accused of having ties to the Chinese Communist Party.

The open letter posed questions regarding Prometheum’s failure to clarify its independent technology development in SEC filings if it truly commenced in December 2019, as stated in Kaplan’s congressional testimony. The letter also questioned why Prometheum continued to assert its ongoing development efforts with Wanxiang and its subsidiary Hashkey in SEC filings throughout 2020 and well into 2021.

This is not the first time Tuberville has made these allegations. Previously, he authored an opinion piece for the Wall Street Journal expressing concerns about Prometheum’s association with Wanxiang and the potential threats it could pose to the data security and privacy of American investors.

Kaplan has previously countered these allegations by stating that although Wanxiang holds a 20% stake in Prometheum, it has no access to the company’s data and technology. Furthermore, he mentioned that the SEC has already investigated this relationship.

Prometheum has faced criticism from the cryptocurrency industry as well, with participants arguing that the broker’s proposed model for trading crypto assets as securities is unfeasible.

The open letter was also signed by Congressmen Blaine Luetkemeyer (R-Mo.), Barry Loudermilk (R-Ga.), Ralph Norman (R-S.C.), Byron Donalds (R-Fla.), and Mark Alford (R-Mo.).

Image credits: Wikimedia

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