When Aaron Kaplan, co-CEO of Prometheum, stepped onto the stage in Congress, few within the crypto realm knew his name. His statement, proclaiming the SEC’s legal regime for digital assets as effective and dismissing the need for new laws, certainly caught the attention of Crypto Twitter. Kaplan presented his firm, Prometheum, as a shining example of a regulated crypto firm, having recently obtained a “special purpose broker-dealer” licence from the SEC.
However, doubts are now emerging about the validity of Kaplan’s grandiose claims, making his firm the new talk of the town for all the wrong reasons.
High-Stakes Spat: Paradigm vs. Prometheum
The ongoing dialogue between Kaplan and Rodrigo Seira, Special Counsel at VC firm Paradigm, has added fuel to the fire. The pair clashed on a recent podcast hosted by crypto journalist Laura Shin, with Seira, a Harvard Law graduate, questioning the effectiveness of Prometheum’s approach in the complex world of securities law.
The Conundrum of Compliance
Despite Kaplan’s proclamations about Prometheum’s compliance with the SEC’s legal regime, critics argue that Kaplan’s firm is falling short of its promises. While the licence allows the firm to store and trade crypto securities, it doesn’t permit the trading of Bitcoin or Ethereum, which make up the lion’s share of the crypto market. Seira argued that while Prometheum may have secured a licence, it lacked a concrete business model.
Even more, telling is Kaplan’s inability to identify any other tokens that Prometheum intends to center its business around. This glaring oversight has led some to question the feasibility of Prometheum’s business model, despite its licensure.
Past Woes and Present Questions
Adding to the scepticism surrounding Kaplan’s assertions is his past involvement in a dubious blockchain startup. His appearance before Congress and alignment with Democratic Party talking points on crypto regulation have further raised eyebrows.
Yet, how Kaplan came to testify before Congress remains a mystery. While some suggest luck and timing, others perceive it as part of a broader narrative that paints a distorted picture of crypto regulation.
The controversy around Prometheum raises pressing questions about the state of crypto regulation. While Kaplan presents his firm as the poster child for a “regulated” crypto company, critics argue that this depiction is a farce.
The real test for Prometheum now lies in its ability to clear the cloud of doubt surrounding its credibility and business model.
