Key Takeaways:
- Prometheum is the new and the first SEC-registered company in the U.S.
- Its CEO Aaron Kaplan explains why many companies fail to register in the U.S.
- However, there is skepticism toward Prometheum.
YEREVAN (CoinChapter.com) — In this day and age, FUD (Fear, Uncertainty, and Doubt) is prevalent all across the crypto ecosystem, warranted or not. And it seems that the surprising debut of the SEC-compliant Prometheum Labs only feeds these fears.
However, this “moral panic” toward Prometheum Labs isn’t as justified as analysts claim. It seems these analysts don’t give a chance to companies at all. So, let’s see who these Prometheum guys are and what future they envision for crypto in the U.S.
The Origins Of Prometheum
Aaron and Benjamin Kaplan, co-CEOs of Prometheum Ember Capital, founded the firm in 2017. They also list as attorneys at the finance-based law firm Gusrae Kaplan.
Prometheum Ember Capital is the first SEC-registered broker-dealer firm that has received approval to operate as a Special Purpose Broker-Dealer (SPBD) for digital asset securities.
A Special Purpose Broker-Dealer (SPBD) actively handles transactions involving digital asset securities. It is a specialized brokerage firm that focuses on facilitating the buying and selling digital asset securities.
Unlike traditional broker-dealers that primarily deal with traditional securities, such as stocks and bonds, an SPBD focuses on the emerging field of digital assets.
In May, Prometheum Ember Capital, a subsidiary, became the first firm to offer custody of digital assets as a qualified custodian. It obtained the Financial Industry Regulatory Authority (FINRA) approval to operate as a special-purpose broker-dealer for digital assets.
In October 2022, another subsidiary, Prometheum Ember ATS, launched its SEC-registered alternative trading system. This platform provides digital asset trading, clearing, settlement, and custody services.
ATS stands for “Alternative Trading System.” An ATS is a platform or exchange that allows the trading of digital assets, such as cryptocurrencies, outside of traditional stock exchanges.
It provides a venue for buyers and sellers to trade digital assets like traditional stock exchanges but with certain differences and exemptions from regulations.
The Difference Of Prometheum
Aaron Kaplan, CEO Of Prometheum, in an interview with Coindesk reporters, went into detail on how Prometheum achieved a consensus with the SEC. Additionally, he explained how their compliance is clearer than anybody else ever achieved.
Promethium Capital plans to clear and settle transactions on its platform, attracting trading and custody activities from pseudo-legal setups to compliant ecosystems. Kaplan further clarifies by saying that they successfully complied with U.S. securities laws.
Moreover, unlike many in the industry, they found proper ways to do so.
Furthermore, he stated that there is a state of inflexibility and unwillingness to comply properly among crypto companies. In his words, firstly, companies that want to engage in the U.S. don’t have properly registered licenses.
Secondly, their DeFi technologies don’t achieve the standards on how securities should be handled in the scope of U.S. regulations.
In his opinion, the successful compliance and registration of Prometheum Capital can serve as a practical example of how crypto companies can approach the route of regulatory registration.
And lastly, Aaron Kaplan states that if companies will follow up with The Federal Securities Laws, that will create a compliant and peaceful ecosystem. It will provide safety for institutional and retail investors even if something goes wrong.
Moreover, investors will know what to expect from the system. And they will know that their rights are protected under U.S. laws.
More Explanation
The goal of Prometheum is also to regain the lost trust after the FTX collapse. In the mind of Kaplan, the FTX collapse created trust issues within the wider community, and a properly registered company like Prometheum can ease these fears and, through its operations, regain the faith lost from institutional and retail investors for the sake of the wider ecosystem.
Also, Prometheum will only list cryptos on its ATS side that are considered securities; that notion excludes Bitcoin. Bitcoin is considered a commodity under U.S. law.
Breaking The FUD A Bit
It is known that Prometheum has ties to Wanxiang Labs from China. And the Prometheum team themselves said that they had them without hiding it. Vitalik Buterin, for example, also has these same ties, but ironically nobody chases him for it.
Who is Wanxiang? Uhhh someone might want to look into this one. CCP affiliate? Wtf?https://t.co/8gXaHDovrg
— Matt Walsh (@MattWalshInBos) June 14, 2023
Analysts like Matt Walsh, for example, create tweets that want to “elegantly call out” Prometheum but on what grounds? Just cause somebody has ties to China-based companies doesn’t mean they are CCP agents. The Buterin mentioned above example also proves the same hypocrisy.
This mentality is either present among conspiracy theorists who see monsters in every corner or “Red Scare” proponents that dub anybody they don’t like or understand as communist CCP proxies.
This type of bias also has racist undertones, quite frankly. Alternatively, if some company wants to comply or complies with the SEC doesn’t exactly mean that they swear by the name of SEC Chairman Gary Gensler or that Aaron Kaplan is his long-lost son.
Another example is the crypto “influencer” Bitboy, who called Prometheum an SEC “Trojan horse” that wants to burn crypto “to the ground.” But on what legitimacy can Bitboy speak?
Ben Armstrong, aka Bitoboy, is a well-known crypto grifter that proved himself to be one numerous times. What grounds he has to speak about fraudulence? None. His fraudulent nature needs no explanation.
