Crypto firm Prometheum gained an edge under Gary Gensler’s SEC. Suddenly its future appears less certain
For many years, the cryptocurrency industry has complained about the SEC’s hardline stance, and its refusal to develop rules that take premium blockchain technology into account. However, one company claimed that the current crypto rules set by the Securities and Exchange Commission (SEC) are good. This stance has paid off as Prometheum won a first-of-its-kind license for cryptocurrency-based securities and, despite being virtually unknown in the world of cryptocurrencies, secured a coveted spot in 2023 to testify about digital assets before Congress. .
But now Promethium has a problem. The election of pro-crypto Donald Trump has led to SEC Chairman Gary Gensler announcing he will leave office early next year, so the company — whose clear inside track with the regulator appeared to give it an advantage — must now compete in a world out there. The rules of the cryptocurrency game are changing dramatically.
Notably, there is an emerging consensus that many cryptocurrencies will do so no They could be considered securities while Trump is president. This differs from the current regulatory environment, where the SEC’s Gensler has pointed out that every token other than Bitcoin is a security, and filed lawsuits that have forced companies to delist tokens like Solana and XRP. However, since the election, companies like Coinbase and Robinhood have relisted those assets in anticipation of the next SEC chairman who will no longer treat those tokens as securities.
This is a potential problem for Prometheum since its business model is largely based on selling itself as a platform where cryptocurrency tokens are used. We are securities, and have the legal infrastructure to support it.
It’s not clear where this leaves Promethium, which has attracted widespread adoption Sarcasm of crypto figures on its role as the industry’s Gensler model. Meanwhile, the company faces an incoming Congress controlled by hostile Republicans, including figures like John Rose (R-Tenn.), who has accused it of having ties to China. Promethium strongly denies this claim.
In response to questions from luck On Promethium’s future in a post-Gensler world, the company provided written answers from Aaron Kaplan, who shares CEO duties with his brother.
According to Kaplan, Prometheum has an opportunity to go beyond cryptocurrencies and use its first-of-its-kind license (known as Special Purpose Broker Dealer) to offer a broader range of assets, including “equities, debt instruments, structured products and options.” ETFs, money market funds” and more in the form of securities on the blockchain.
“We expect President Trump’s administration to oversee this market shift as trillions of securities are issued on blockchain, ushering in the benefits that blockchain technology has long promised market participants,” Kaplan wrote.
Others aren’t so sure. Matt Walsh, co-founder of influential cryptocurrency venture capital firm Castle Island, who has been an outspoken critic of Prometheum, said: luck He saw little evidence of anyone using the company’s platform to trade in the real world. While financial giants such as Goldman Sachs and BlackRock, along with local cryptocurrency companies such as Superstate, dabble in tokenized traditional assets, this is so far still a very niche area of finance.
Asked whether Promethium could point to real-world customers or other evidence of gaining traction in the market, Kaplan said the company is still in the “very early stages” and is “actively engaged in discussions with financial institutions.”
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