Blockchain Association Files FOIA Request to the SEC
The United States crypto lobby group Blockchain Association is seeking further information on the crypto firm Prometheum. The Association has filed a request under the Freedom of Information Act (FOIA) to the U.S. Securities and Exchange Commission (SEC), marking a significant development in the ongoing dialogue around crypto regulations.
Prometheum in the Spotlight
Prometheum, previously a somewhat lesser-known company within the crypto sphere, has recently attracted significant industry attention. Its CEO, Aaron Kaplan, made headlines when he expressed his support for regulating cryptocurrencies under securities laws and the SEC, during a recent House hearing. This stance contrasts sharply with the views of many other industry leaders.
Unveiling Prometheum’s Regulatory Stance
On June 15, Marissa Coppel, counsel for the Blockchain Association, announced the group’s FOIA request to the SEC. The request targets documents and communications related to Prometheum, reflecting the Association’s concern over the company’s regulatory stance.
Coppel expressed suspicion regarding the circumstances under which Prometheum was approved as a special purpose broker-dealer (SPBD) for digital assets. She raised questions about this decision, given its timing amidst what she described as “aggressive SEC enforcement.”
Raising Eyebrows: Kaplan’s Congressional Testimony
Coppel was also skeptical about Kaplan’s ability to provide testimony at a congressional hearing on industry regulations. At the June 13 House hearing, Kaplan stated that Prometheum did not receive any “additional exemptive relief from the SEC” when questioned by Representative Mike Flood.
Prometheum’s Ties to Former SEC and FINRA Staff
Suspicions around Prometheum have been further fueled by the fact that the company’s team includes former SEC and Financial Industry Regulatory Authority (FINRA) staffers. Prometheum’s chief compliance officer, Joseph Zangri, served as an SEC enforcement attorney in the mid-to-late 1990s. Additionally, the company’s chief regulatory officer, Rosemarie Fanelli, joined Prometheum after a nearly 14-year tenure at FINRA.
Moreover, the co-founders and co-CEOs of Prometheum, Aaron and Benjamin Kaplan, have connections with former SEC staff through their law firm, Gusrae Kaplan. The Kaplans’ law firm was established by a former Chief Attorney of the SEC’s Division of Enforcement, further linking Prometheum to former SEC insiders.
Crypto Firms Hiring Ex-Regulatory Staff: A Trend?
While suspicions around Prometheum persist, it’s important to note that hiring former regulatory staffers is not unusual in the crypto industry. Following a lawsuit from the SEC, Binance.US appointed former SEC enforcement co-director George Canellos as a lawyer. Circle’s newly appointed chief legal officer, with a resume spanning numerous government roles, is another example of this trend. Nonetheless, the Blockchain Association’s request for information underscores the ongoing scrutiny of crypto regulation and industry practices.
