TruthArchive.ai - Tweets Saved By @MattWalshInBos

Posted - June 14, 2023 at 7:17 PM

Saved - June 15, 2023 at 4:56 AM

reSee.it AI Summary

Prometheum, a digital asset securities firm, recently received approval for a Special Purpose Broker-Dealer license. However, their claims of regulatory clarity are unfounded, as their ATS will not work unless tokens are registered with the SEC. Prometheum also has their own chain and token, and has raised $48.19 million, with ties to China-affiliated firms. The SEC's promotion of Prometheum as an example of compliance is bizarre, and may be part of a larger PSYOP to oppose the McHenry-Thompson market structure bill.

@MattWalshInBos - Matt Walsh

This Prometheum storyline has got to be the strangest thing I have seen in awhile in this industry. Has anyone actually looked into this? Beyond bizarre…

@MattWalshInBos - Matt Walsh

Last month, in the midst of the SEC bringing cases on Coinbase + Gemini, and giving the stiff arm to Robinhood and others, Prometheum gets approval for a first of its kind Special Purpose Broker-Dealer (SPBD) for digital asset securities…

@MattWalshInBos - Matt Walsh

Then Prometheum’s CEO somehow gets a seat in front of Congress yesterday and starts reading off pre-written notes clearly coordinating narratives with Democratic members of Congress (or the SEC)

@SGJohnsson - Scott Johnsson

Wow, Prometheum's CEO, whose sole credential is heading a special purpose ATS/BD for digital securities, sure seems to have a lot of opinions on unrelated topics like banking principles/stablecoins-or at least his prewritten notes curiously responsive to every Dem question does

@MattWalshInBos - Matt Walsh

As @RSSH273 points out, this ATS absolutely will not work unless the projects first register the tokens with the SEC. There are currently no tokens registered with the SEC because the current regime is not viable for public blockchain networks..

@RSSH273 - Rodrigo

Founder of Prometheum is testifying @FinancialCmte hearing on digital assets today He will argue he represents the “compliant path for crypto” and those asking for updated regs are just scofflaws However, he is wrong on the law and his approach cannot work as advertised

@MattWalshInBos - Matt Walsh

US Representative Mike Flood hit the nail on his head on why Prometheum’s claims are utter nonsense:

@AlexanderGrieve - Alexander Grieve

For those that didn’t stick around until the end of the @FinancialCmte hearing today, this exchange between @USRepMikeFlood and @PrometheumInc CEO Aaron Kaplan is an absolute must-watch. Flood explicitly lays out why Prometheum’s claims that their SPBD approval is evidence of a…

Video Transcript AI Summary

The speaker begins by referencing a comment letter from Prometheum regarding the SEC's broker dealer framework. They highlight the burden on the industry to determine which digital assets are securities and the need for clarity in the regulatory framework. The speaker then questions what has changed since the letter was written and why Prometheum called for clarity. The response mentions additional enforcement actions and statements by the SEC that have clarified the designation of digital assets as securities. The speaker further questions why Prometheum's customers cannot trade popular digital assets like ether and bitcoin, to which the response mentions the need for a gradual approach in adding assets. The speaker concludes by emphasizing the lack of a consistent definition of a digital asset security and the need for legislation to address this issue.

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Full Transcript

Speaker 0: Thank you, Mr. Nickel. I now recognize myself for 5 minutes. I'd like to start by to read a question from a comment letter that Promethean sent in response to the SEC's December 2020 special purpose broker dealer framework. The definition of a digital asset security as used in the proposal is a digital asset that meets the definition of a security under the federal securities laws. This definition puts a burden on the industry to determine which digital assets are securities. As a result, we believe the clarity is needed to understand the regulatory framework they must comply with. That was in a letter dated April 20 SIX from Prometheum, specifically signed by Benjamin S. Caplan, co CEO of the company. I offer this into the record without objection. This concern, which Promethean themselves raised in 2020 probably sounds familiar for those who track this committee closely. It is the exact same concern we've heard from witnesses in front of this committee before. How can a broker dealer register if they don't know which assets are a security and which are not? Further, it makes the same argument that other firms have made that the lack of clarity from the SEC puts an undue burden on the industry. Mister Kaplan, in your testimony, you were very confident that no new legislation is needed in the digital asset space to clarify this question. What has changed between the date of this letter in 2021 and when your firm called for clarity? And now. What has changed? Speaker 1: Over the 2 plus years since that time, there's been additional enforcement actions and statement by the which have clarified any questions that we had in regards to the, designation of a digital asset in as a security. Speaker 0: Mister Kaplan, Prometheum's website says that Prometheum ATS supports many tokens that mostly trade on crypto exchanges. I'd like to dig in on that just a little bit. Can Promethean customers trade in ether? If your answer is yes, please explain how. Speaker 1: Not currently. Speaker 0: Can Promethean customers trade in Bitcoin? If your answer is yes, please explain how. No. Just for the audience at Home's benefit, ether and bitcoin make up more than 60% of the digital asset market. Mr. Caplan, given that either ether and bitcoin make up more than 60% of the digital asset market, if the current system is working, why can't your customers trade the most popular and widely used digital assets? Speaker 1: Regulation and new ATSs and custodians, should take a crawl, walk, run approach. And, essentially, they will proceed to add additional assets and abilities as time goes on. I'd like to point out when the, Speaker 0: I'm gonna reclaim my time. Mr. Caplan, did Promethean receive any additional exempted relief from the SEC that has not been publicly shared? No. Thank you, Mr. Caplan. Promethean's special purpose broker dealer license does not address the core issue. There is not a consistent definition of a digital asset security within current law. This point was made obvious when Chair Gensler could not say definitively whether ether is a digital asset said security when asked by Chairman McHenry in this very room a couple months ago. In other words, that same question that Promethean themselves raised in their 2021 comment letter is still unanswered. That's why legislation is needed. That's the problem that the Chairman's bill works to solve. To testify in front of our committee that your company's charter, which only allows for trading in a very small subset of assets is evidence that no legislation is needed just doesn't make sense. If anything, the fact that Promethean's customers cannot trade some of the most popular digital assets is an illustration of the broader problem, mister Kaplan. I yield back.

@MattWalshInBos - Matt Walsh

The Prometheum guys want us to believe that all L1s are securities and will need to come and trade on Prometheum. Not happening. But enter Prometheum Chain! What is that you say? These guys have their own chain? Yes, and a token! https://www.sec.gov/Archives/edgar/data/1718271/000101905621000267/ex13_4.htm

Webmaster Frequently Asked Questions sec.gov

@MattWalshInBos - Matt Walsh

“Well that’s just a PPT slide, they surely won’t do a token”…Wrong. They already pre-sold some to Wanxiang and others: https://www.sec.gov/Archives/edgar/data/1718271/000101905621000346/offeringcircular.htm

Webmaster Frequently Asked Questions sec.gov

@MattWalshInBos - Matt Walsh

Who is Wanxiang? Uhhh someone might want to look into this one. CCP affiliate? Wtf?

@MattWalshInBos - Matt Walsh

🧐 https://www.wsj.com/articles/crypto-communism-has-a-new-meaning-prometheum-custody-data-commodities-china-d655bb88

Opinion | ‘Crypto Communism’ Has a New Meaning China seeks to infiltrate the U.S. financial system, and the SEC and Finra seem oblivious. wsj.com

@MattWalshInBos - Matt Walsh

According to Pitchbook, Prometheum has raised $48.19 million. Like all private companies they are required to file a form D when they raise. Oddly even in their early rounds they used an investment bank to raise capital (very rare for venture backed startups at the early stage)..

@MattWalshInBos - Matt Walsh

They have paid in excess of $1.5 million in sales commissions to a NJ based outfit called Network 1 Financial Securities

@MattWalshInBos - Matt Walsh

Network 1 Financial Securities has quite the regulatory track record https://files.brokercheck.finra.org/firm/firm_13577.pdf

@MattWalshInBos - Matt Walsh

Just like Prometheum, Network 1 Financial is a China affiliated firm https://files.adviserinfo.sec.gov/IAPD/Content/Common/crd_iapd_Brochure.aspx?BRCHR_VRSN_ID=842671

@MattWalshInBos - Matt Walsh

And who is running Prometheum? These guys:

@MattWalshInBos - Matt Walsh

Who look alot like these guys: https://www.gusraekaplan.com/attorneys/

» AttorneysAttorneys – Gusrae Kaplan Nusbaum PLLC gusraekaplan.com

@MattWalshInBos - Matt Walsh

The Kaplan's are being held up as security law experts. Two of them went to a now unaccredited law school. https://www.abajournal.com/news/article/aba-approval-withdrawn-for-thomas-jefferson-school-of-law

ABA approval withdrawn for Thomas Jefferson School of Law The ABA Journal is read by half of the nation's 1 million lawyers every month. It covers the trends, people and finances of the legal profession from Wall Street to Main Street to Pennsylvania Avenue. abajournal.com

@MattWalshInBos - Matt Walsh

Other companies like Coinbase and Gemini have pursued the B/D and ATS paths. Those licenses under current SEC regs don't let you do much. The SEC is implying the Prometheum path solves the regulatory clarity issues. It doesn't.

@MattWalshInBos - Matt Walsh

What is going on here? Bizarre that this fringe player with no biz model is being held up as an example of compliance by the SEC when the actual businesses in the United States can’t get a fair shot. An SEC PSYOP to have the Dems oppose McHenry-Thompson market structure bill?