In a surprising turn of events, the U.S. crypto lobby group, Blockchain Association, has submitted a Freedom of Information Act (FOIA) request to the U.S. Securities and Exchange Commission (SEC) on June 15, 2023. Their target? A formerly obscure company in the crypto realm, Prometheum.
This request comes hot on the heels of Prometheum’s CEO, Aaron Kaplan, taking a stand at a House hearing that caused quite a stir in the industry. The CEO’s stance favored regulating crypto under securities laws and the SEC, a position that is starkly contrasted with other industry voices.
Marissa Coppel, counsel for the Blockchain Association, raised eyebrows as she expressed “suspicion” over Prometheum’s approval as a special purpose broker-dealer (SPBD) for digital assets. This occurred “in the midst of aggressive SEC enforcement,” she noted on Twitter.
Kaplan’s appearance at a congressional hearing on industry regulations also had her questioning the circumstances.
On June 13, at the House hearing, Kaplan maintained that his firm did not receive any “additional exemptive relief from the SEC.” This statement was made in response to Representative Mike Flood’s questioning.
The intrigue doesn’t end there. Several individuals have voiced suspicions over the composition of the Prometheum team, many of whom are former SEC and Financial Industry Regulatory Authority (FINRA) staffers. The company’s chief compliance officer, Joseph Zangri, was an SEC enforcement attorney in the mid-to-late 1990s. Furthermore, Rosemarie Fanelli, who assumed the role of chief regulatory officer in May 2021, has nearly 14 years of experience in senior roles at FINRA.
The co-CEOs of Prometheum, Aaron and Benjamin Kaplan, are also attorneys at Gusrae Kaplan; a law firm founded by a “former Chief Attorney of the SEC’s Division of Enforcement. Prometheum’s chairman, Martin H. Kaplan, is also a Gusrae Kaplan co-founder.
This isn’t entirely out of the ordinary, as hiring former regulatory staffers is not uncommon in the crypto space. For instance, Binance.US roped in former SEC enforcement co-director George Canellos as a lawyer after an SEC lawsuit.
Moreover, the newly appointed Chief Legal Officer of stablecoin issuer Circle boasts of a resume filled with roles in the U.S. Treasury and the Commodity Futures Trading Commission.
