U.S. Senator Tommy Tuberville of Alabama and Congressman Blaine Luetkemeyer have taken decisive action by requesting an investigation into Prometheum, Inc. The lawmakers have expressed their concerns about potential false testimony to Congress and violations of U.S. securities laws. In a letter dated July 10, 2023, Tuberville and Luetkemeyer highlighted discrepancies between Prometheum’s statements before Congress and its Securities and Exchange Commission (SEC) filings. The alleged contradiction has raised suspicions and calls for a thorough review.
The legislators specifically pointed out the testimony of Aaron Kaplan, Co-CEO and founder of Prometheum, who claimed that the company had independently developed its technology platform since December 2019, separate from its China-based partners. However, Tuberville and Luetkemeyer argue that this assertion does not align with information found in Prometheum’s financial statements and SEC filings.
The lawmakers emphasized that despite Kaplan’s claim of independence, Prometheum continued to rely on its partnership with Shanghai Wanxiang Blockchain, Inc. (Wanxiang) and its subsidiary HashKey Digital Asset Group, Ltd. The fact that these entities have ties to the Chinese Communist Party fueled further concern. Prometheum’s audited financial statements and SEC filings from 2020 and 2021 indicated that the company was still dependent on its connection with these Chinese partners, even after December 2019. This contradiction between Kaplan’s testimony and the official filings has cast doubt on the veracity of Prometheum’s statements.
Tuberville and Luetkemeyer highlighted the fact that Prometheum explicitly emphasized its relationship with Wanxiang in its SEC filings and public appearances. This emphasis could have potentially misled investors and created the perception that the partnership was ongoing and beneficial. The lawmakers argue that Kaplan’s testimony before Congress appears to conflict with the information presented in these official filings.
The legislators underlined the seriousness of making false statements to Congress, which is classified as a crime. Additionally, submitting false or misleading information in SEC filings is considered securities fraud. In light of these allegations, Tuberville and Luetkemeyer called for a comprehensive review of Prometheum’s statements, its continued membership in the Financial Industry Regulatory Authority (FINRA), and its registration with the SEC.
Prometheum, a New York-based company, recently made history by becoming the first crypto-focused company to register with the U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) as a special-purpose broker-dealer. This achievement is significant for the crypto industry, as it paves the way for other crypto companies seeking regulatory approval to engage with digital assets. However, since Kaplan’s congressional testimony, Prometheum has faced speculation and criticism.
As a relatively unknown player at the beginning of the year, Prometheum’s ability to gain SEC approval where others have failed has raised questions about its operations and intentions. The scrutiny faced by Prometheum after its registration with the SEC and FINRA has highlighted the need for transparency and accountability in the crypto industry.
U.S. Senator Tommy Tuberville and Congressman Blaine Luetkemeyer have called for a thorough investigation into Prometheum, Inc. The lawmakers have expressed their concerns about inconsistencies between the company’s testimony before Congress and its SEC filings. Tuberville and Luetkemeyer emphasized the seriousness of making false statements to Congress and submitting misleading filings, highlighting the need for a comprehensive examination of Prometheum’s statements and its compliance with regulatory bodies. The recent scrutiny faced by Prometheum after its registration with the SEC and FINRA serves as a reminder of the importance of transparency and accountability within the crypto industry.
