Prometheum left the Chamber of Digital Commerce in April 2023

Quick Take

  • Prometheum left the Chamber of Digital Commerce in April 2023.
  • The company no longer thinks that more clarity on crypto regulation is needed, which contrasts with the view taken by the blockchain advisory group.

Prometheum, once a member of the President’s Circle of the Chamber of Digital Commerce, left the blockchain advocacy group earlier this year.

“Prometheum made the decision to leave the Chamber of Digital Commerce in early 2023. We thank and respect the Chamber for its efforts but no longer need the affiliation,” a spokesperson told The Block. 

The advocacy group confirmed the departure, noting in a statement that it continues "to be a committed advocate for the ecosystem for regulatory clarity to support the development of blockchain technology and the use of digital assets.”

Prometheum is an SEC-registered broker dealer that wants to offer trading of cryptocurrencies that are securities. 

The company originally claimed that new regulation was needed for the sector. In 2021, Prometheum said that clarity was needed for broker dealers and other entities to understand the regulatory framework that they must comply with, and it asked for clarification on the definition of digital asset securities. 

This is a view that is still shared by many market participants including major exchanges like Coinbase, regulatory bodies like the Chamber of Digital Commerce and even some U.S. lawmakers. In April, for instance, Republican Patrick McHenry raised the question of whether ether is a security to Securities and Exchange Commission Chair Gary Gensler, in an attempt to get such clarity although none was provided.

A different view

Yet in front of Congress in June, Prometheum CEO Aaron Kaplan set out a contrary view, claiming the SEC has actually laid out a path for crypto firms to be compliant with securities laws. The view appears to be in contradiction with the Chamber of Digital Commerce, which argues that regulatory clarity is not yet there.

The company had initially appeared to show some progress that supported its view. In October 2022, the company said it had launched its alternative trading system, claiming that the company “provides institutional traders and investors the ability to trade digital asset securities with pricing transparency and protections.” It named five tokens supported at launch.

Yet in emailed comments to The Block, Prometheum said that right now there are no such tokens traded on the platform. The company added that it still hasn’t launched yet.

It's also still unclear how Prometheum expects to offer trading of most crypto tokens, since the SEC deems them as unregistered securities — something that has pushed even regulated exchanges like Robinhood to delist such tokens. This includes two of the tokens that Prometheum initially named in its launch announcement. 

For such tokens to be compliant, they would need to register with the SEC and provide a whole host of information on a regular basis. According to a recent podcast interview, Prometheum's solution to the lack of such information when writing disclaimers has been to write “N/A.” It's an approach that has left other crypto lawyers somewhat bemused.

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