SEC Inspector General Urged To Investigate Prometheum SPBD Approval Amidst Crypto Regulatory Scrutiny

The Blockchain Association, a nonprofit organization advocating for pro-innovation policies in relation to Bitcoin, has called for an investigation into the Securities and Exchange Commission (SEC) and its approval of Prometheum Ember Capital as a Special Purpose Broker Dealer (SPBD). In a letter to the Inspector General of the SEC, the association raises concerns about potential impropriety and ethical issues surrounding the approval process.

The letter highlights the lack of regulatory clarity regarding how U.S. securities laws apply to digital assets and criticizes SEC Chair Gary Gensler, accusing the SEC of overt hostility towards the digital assets industry while citing enforcement actions and proposed rulemaking that have impacted the sector. The approval of Prometheum as an SPBD is seen as concerning, as other companies with what the letter describes as "legitimate business models" have faced denials or delays in obtaining similar licenses.

The letter states Prometheum's license approval comes at a time when the company has no working product or assets, raising further questions. The association questions whether Prometheum received preferential treatment or leveraged personal connections to gain an unfair advantage. They express concern that SEC Chair Gensler is using Prometheum and the SPBD licensure process to impede congressional efforts towards legislation and promote what it views as a false narrative, that the law is clear regarding digital asset securities. “There's no question Prometheum is hiding something on its SEC relationship,” said Dan Spuller, head of industry affairs at the Association.

The Blockchain Association has submitted a request to the SEC under the Freedom of Information Act, seeking documents and communications related to the matter. They urge the opening of an investigation to address these concerns and provide clarity. The outcome of the investigation will determine whether there was any impropriety or validate the inferences made by the association.