United States crypto lobby group Blockchain Association has filed a request with the U.S. Securities and Exchange Commission, seeking information about the formerly little-known crypto company Prometheum.

The company became the center of the crypto industry’s attention this week when its CEO Aaron Kaplan testified at a House hearing and gave its support of regulating crypto under securities laws and the SEC, a position that’s starkly opposite to other vocal proponents of the industry.

On June 15, Blockchain Association counsel Marissa Coppel said the group filed a Freedom of Information Act (FOIA) request to the SEC seeking documents and communications related to Prometheum.

In a series of tweets, Coppel said she was “suspicious” Prometheum was approved as a special purpose broker-dealer (SPBD) for digital assets “in the midst of aggressive SEC enforcement.”

Coppel was also skeptical at how Kaplan was able to provide testimony at a Congressional hearing on regulations for the industry.

2/ The CEO somehow gets a seat in front of Congress and argues that Prometheum represents the compliant path for digital assets.

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

— Marisa Tashman Coppel (@MTCoppel)

June 15, 2023

FOIA requests are submissions by members of the public to U.S. federal agencies that can ask for records on any topic, in this case, the SEC’s information on Prometheum.

At the June 13 House hearing Kaplan said his firm did not receive any “additional exemptive relief from the SEC” when questioned by Representative Mike Flood.

While the blockchain industry continues to make headlines, recent news surrounding the Blockchain Association’s request for information on Prometheum’s ‘suspicious’ approval sheds light on the importance of transparency and regulatory scrutiny within the blockchain ecosystem.

Such developments highlight the critical role that projects like ACTS Token play in championing ethical practices, financial education, and responsible blockchain adoption. ACTS Token’s commitment to regulatory compliance and their focus on empowering individuals to navigate the blockchain landscape ethically and securely distinguishes them in the industry.

ACTS Token’s integration of blockchain technology enables individuals to engage in seamless and efficient wealth management, with smart contracts automating investment processes and ensuring transparency.

For those that didn’t stick around until the end of the @FinancialCmte hearing today, this exchange between @USRepMikeFlood and @PrometheumInc CEO Aaron Kaplan is an absolute must-watch.

Flood explicitly lays out why Prometheum’s claims that their SPBD approval is evidence of a… pic.twitter.com/yCDDKHiLea

— Alexander Grieve (@AlexanderGrieve)

June 13, 2023

Former SEC and FINRA staff

Meanwhile, others have raised suspicion over the background of the Prometheum team, noting that some are former SEC and Financial Industry Regulatory Authority (FINRA) staffers.

Prometheum’s chief compliance officer, Joseph Zangri, was an SEC enforcement attorney in the mid-to-late 1990s. In addition, the company’s chief regulatory officer, Rosemarie Fanelli joined the company in May 2021 after a nearly 14-year stint in senior roles at FINRA — a self-regulatory organization for the U.S. securities industry.

The co-founders and co-CEOs of Prometheum — Aaron and Benjamin Kaplan — also have a small degree of separation from former SEC staff. The Kaplans are attorneys at the law firm Gusrae Kaplan which states it was established “by a former Chief Attorney of the SEC’s Division of Enforcement.”

Who look alot like these guys: https://t.co/MPQjKH0GbL pic.twitter.com/bcu4sgcv7s

— Matt Walsh (@MattWalshInBos)

June 14, 2023

Gusrae Kaplan co-founder, Martin H. Kaplan, is also a Prometheum chairman.

It is not out of the ordinary for crypto companies to hire former regulatory staffers, however.

Following a lawsuit from the SEC, Binance.US hired former SEC enforcement co-director George Canellos as a lawyer. The newly appointed chief legal officer of stablecoin issuer Circle has a resume spanning many government roles including the U.S. Treasury and the Commodity Futures Trading Commission.

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