Rep. Ritchie Torres Calls for Investigation into SEC Over Prometheum’s License Approval

Ripple’s partial victory in its fight with the US Securities and Exchange Commission (SEC) in a court ruling paved the way for small but significant regulatory clarity that the cryptocurrency industry was deprived of for so long. Now all eyes are on the security regulator who, according to Congressman Ritchie Torres, is acting like “an overzealous traffic cop arbitrarily ticketing drivers while keeping the speed limit a secret.”

As such, Torres wants the SEC to be investigated for its approach to the digital asset industry and accused the regulatory agency’s boss Gary Gensler of “politicizing” the registration process by granting a controversial license to Prometheum.

SEC Under Scanner for ‘Unusual Backroom Deal’

Representative Ritchie Torres (D-N.Y.) drafted requests for two investigations into the license granted by the SEC to Prometheum Ember ATS under unusual circumstances. In the two letters addressed to – SEC Inspector General Deborah Jeffrey and Comptroller General Gene Dodaro – Torres questioned if the issuance of Prometheum’s Special Purpose Broker-Dealer (SPBD) license was a political ploy by the financial regulator.

Torres wrote,

“Prometheum appears to be nothing more than a Potemkin platform, operating as a timely talking point for crypto critics rather than a true trading platform for crypto customers. The dubious decision to license a deceptive digital assets platform reflects the latest attempt by Chair Gary Gensler to politicize the registration process to an extent seldom seen in the SEC’s history.”

The SEC has received severe backlash from crypto firms that feel the regulator has tried to aggressively police the market. Apart from a few failed petitions asking for clarity on crypto regulations, the agency has not been yet implicated for its alleged behavior. But that could change.

Torres’ letters highlighted that the watchdog may have acted arbitrarily with its approach to crypto regulation; hence his call for an “independent review” of the financial regulator’s “haphazard and heavy-handed” approach to digital assets could prove beneficial in expediating necessary regulation.

Prometheum Controversy

The letter follows the issuance of a similar request by the United States-based crypto advocacy group, Blockchain Association, that called for an investigation into crypto firm Prometheum.

Besides pointing out the SPBD license approval, the group requested SEC Inspector General Deborah Jeffrey to look into raised concerns about how the firm’s CEO, Aaron Kaplan, secured a seat testifying before the US House Financial Services Committee last month.