The crypto industry has long criticized the Securities and Exchange Commission for its strict approach and failure to adapt rules to blockchain technology. However, one firm, Prometheum, believes the SEC’s current rules for crypto are sufficient. This belief has paid off, as Prometheum secured a groundbreaking license for crypto-based securities and earned a notable slot to testify about digital assets before Congress in 2023, despite being relatively unknown in the crypto space.
However, Prometheum now faces a challenge. With SEC Chair Gary Gensler set to resign early next year due to the election of pro-crypto Donald Trump, the firm, which seemed to have privileged access to the regulator, must navigate a rapidly changing regulatory landscape in the crypto industry.
A key development is the increasing consensus under Trump’s administration that many cryptocurrencies will not be categorized as securities. This differs from the current environment where Gensler has indicated that most tokens, excluding Bitcoin, are securities, leading to delistings of popular tokens like Solana and XRP. Since the election, platforms like Coinbase and Robinhood have relisted these tokens in anticipation of a new SEC Chair who will treat them differently.
This shift poses a potential challenge to Prometheum, whose business model revolves around treating crypto tokens as securities and establishing the necessary legal framework to support this.
The firm’s future is uncertain, especially as it has faced criticism from the crypto community for its alignment with Gensler’s regulatory approach. Additionally, with an incoming Congress controlled by Republicans who have accused Prometheum of ties to China, the firm is under increased scrutiny.
In response to queries about Prometheum’s prospects post-Gensler, the firm’s co-CEO Aaron Kaplan expressed optimism about expanding beyond crypto by leveraging its Special Purpose Broker Dealer license to offer a range of asset classes on a blockchain.
Despite Kaplan’s positive outlook, skeptics like Matt Walsh of Castle Island question the firm’s usage and impact in the market. While major financial institutions are exploring tokenized assets, the adoption of such technology remains limited within the finance industry.
When asked about the firm’s client base and market traction, Kaplan acknowledged that Prometheum is in a nascent stage and is actively engaging with financial institutions.
