What Is The Main Risk Associated With A Cryptocurrency Hot Wallet?
What Is The Main Risk Associated With A Cryptocurrency Hot Wallet?
Several members of the United States House Financial Services Committee have raised concerns over Prometheum’s special purpose broker-dealer (SPBD) license.
Committee Chair Patrick McHenry and twenty members of the House directed concerns to the Chair of the Securities and Exchange Commission (SEC) Gary Gensler and Robert Cook, the President and CEO of the Financial Industry Regulatory Authority (FINRA).
According to the inquiries sent, they believe that the timing and circumstances surrounding the approval of Prometheum’s SPBD license are alarming. They also noted that while Prometheum has set itself up as “a solution” for regulated digital asset services, the company has not served any customers yet. For the Financial Services Committee members, this raises questions about why FINRA chose to approve Prometheus as a crypto platform that has no operational history or customer track record. This, to the Committee, is especially concerning while there are ongoing discussions between the industry and lawmakers about regulation and uncertainty in the cryptocurrency and digital asset space.
#NEW: Chairman @PatrickMcHenry led Republicans on the Financial Services Committee in letters to @FINRA and @SECGov regarding the shady approval of Prometheum as the only Special Purpose Broker-Dealer for digital assets.
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— Financial Services GOP (@FinancialCmte) August 15, 2023
While Prometheum was founded back in 2017, it has only recently come into the spotlight in the industry. In June, co-founder and co-CEO, Aaron Kaplan, testified before the House committee after securing its SPBD license a month earlier. The granting of the license sparked wide scepticism in the crypto community and led to the call for further investigation from crypto advocacy groups and lawmakers.
In response to the concerns from the crypto community, the House Committee members have moved proactively, requesting the SEC and FINRA to provide the relevant documents and communication records linked to Prometheum’s SPBD license by August 22nd. As part of the licenses, the House Committee has also urged FINRA to address specific queries related to Prometheum, including allegations of potential associations with the Chinese Communist Party (CCP).