The SEC faces investigations over its handling of digital assets, including concerns over a license granted to Prometheum Ember ATS and allegations of political influence.
Key Points
- SEC faces investigations over handling of digital assets following Representative Torres’ concerns and request for scrutiny.
- Controversy surrounds the SEC’s decision to grant Prometheum Ember ATS a special purpose broker-dealer license, raising suspicions of political influence.
- Crypto industry debates the Prometheum license, with arguments over the need for new regulations and concerns about the firm’s lack of token listing.
The U.S. Securities Exchange Commission (SEC) is facing two separate investigations after Representative Ritchie Torres (D-NY) requested a closer look at the agency’s handling of digital assets. Torres expressed concern over the SEC’s decision to grant Prometheum Ember ATS a special purpose broker-dealer (SPBD) license, prompting questions about whether the move was politically motivated.
Busy news day. Democratic Congressman U.S. @RepRitchie calls for an investigation into the @SECGov‘s decision to grant @PrometheumInc a SPBD license. See letter here 👇#Prometheum #Blockchain #DigitalAssets #Crypto #Fintech #Web3 #SEC@Crypto_Tax_Law @FarukOkce @ericporper pic.twitter.com/Kqr7cfe3hD
— North Carolina Blockchain Initiative (@NC_Blockchain) July 13, 2023
License Controversy Surrounds Prometheum Ember ATS
Prometheum Ember ATS has obtained a license to act as a cryptocurrency exchange, although it is currently not engaged in this activity due to regulatory limitations. Representative Torres believes the SEC’s decision to grant the license raises suspicions about integrating digital assets into the existing regulatory framework. He criticized Chair Gary Gensler for potentially politicizing the registration process, calling it a “dubious decision.”
In addition to the Prometheum controversy, Representative Torres has called for an investigation into the SEC’s failure to establish a robust and practical registration process for real-world digital asset platforms. Torres plans to send his requests to the SEC’s Office of the Inspector General and to the Government Accountability Office.
Cryptocurrency Industry Divided over Prometheum License
The issuance of Prometheum’s license has sparked a heated debate within the crypto industry. While the SEC and Prometheum’s co-CEO Aaron Kaplan argue that the license indicates no need for new regulations, critics claim that the firm, despite having a license, does not currently list any tokens. The lack of clarity regarding when and how it will begin trading tokens adds to the skepticism surrounding the license.
Representative Torres’ investigation requests coincide with a previous call for an investigation into Prometheum’s ties to Chinese entities Shanghai Wanxiang Blockchain Inc. and HashKey, as well as their alleged connections to the Chinese Communist Party. Though no concrete evidence of impropriety has been presented thus far, the industry demands answers and urges for an investigation to either verify or debunk these claims.
Representative Torres likened the SEC’s approach to “an overzealous traffic agent who arbitrarily tickets drivers for speeding while keeping everyone endlessly guessing about the speeding limit.” He emphasized that regulation by enforcement is an ineffective way to regulate the industry and create a clear framework for digital assets.
End Points
The ongoing investigations into the SEC’s actions regarding digital assets mark a crucial moment in the cryptocurrency regulation debate. The outcome of these investigations will likely have far-reaching implications for the industry, shaping the future of digital asset integration and establishing guidelines for regulatory processes.
