Prometheum Faces Republican Push For Justice Department And SEC Probe

Prometheum, the subject of scrutiny, finds itself under the spotlight as six members of the United States Congress urge the US Securities and Exchange Commission and the Department of Justice to launch investigations into the company. Their concern stems from alleged connections between Prometheum and the Chinese Communist Party.

In addition to the SEC and DOJ, lawmakers have enlisted the Financial Industry Regulatory Authority to conduct its own investigation into Prometheum’s alleged ties to the CCP. The aim is to delve deeper into the company’s operations and shed light on any potential regulatory violations.

A specific focus of the congressional group’s inquiry lies with Aaron Kaplan, the CEO of Prometheum.

Prometheum Testimony Questioned

Alabama Sen. Tommy Tuberville, along with five Republican members of the House of Representatives, has raised concerns about the veracity of Kaplan’s testimony during a hearing held on June 13.

The hearing focused on regulatory clarity in the cryptocurrency industry. In a letter penned on July 10, the lawmakers accused Kaplan of potentially providing false information.

The core allegation made by Tuberville and his colleagues revolves around Prometheum’s purported connections to investors associated with the CCP. Specifically, they named Shanghai Wanxiang Blockchain and HashKey Digital Asset Group as entities with ties to Prometheum.

.@SenTuberville op-ed: It’s past time for the DOJ and the SEC to investigate Prometheum’s ties to Chinahttps://t.co/57yMDtMt7V

— 1819 News (@1819News) July 10, 2023

According to the lawmakers, these alleged ties could compromise the independence of Prometheum and raise national security concerns.

Furthermore, Tuberville and the lawmakers argue that Kaplan’s testimony before Congress contradicted information disclosed by Prometheum in its filings with the SEC. They claim that Kaplan’s statements implied that Prometheum had been developed independently from Wanxiang and HashKey, while the SEC filings allegedly indicated a different narrative.

The lawmakers have called upon SEC Chair Gary Gensler and Attorney General Merrick Garland to launch an investigation into the matter.

Tuberville’s Bill Aims To Restrict Chinese Ownership In American Digital Asset Firms

In June, Tuberville took action by introducing a bill aimed at prohibiting companies based in China from acquiring ownership stakes in American digital asset firms. This bill received co-sponsorship from Sen. Kristen Gillibrand, a Democrat from New York who has been actively advocating for comprehensive cryptocurrency regulations in the US.

The proposed legislation, if passed, would bring about amendments to the Commodity Exchange Act. Its main objective is to impose restrictions on the Commodity Futures Trading Commission when it comes to approving American-based cryptocurrency companies.

Specifically, the bill seeks to prevent the CFTC from granting authorization to any crypto firm that has any level of ownership by an entity that is established in the People’s Republic of China.

Featured image from Cryptopolitan