U.S. Senator Tommy Tuberville (R-Alabama) is asking for an investigation of a Chinese-linked crypto-currency exchange company firm Prometheum, Inc.
Senator Tuberville recently discussed Prometheum’s alleged China ties on Fox Business Channel’s Larry Kudlow.
“Crypto is here to stay,” Tuberville told Kudlow. “We have got to have regulations, but the thing that we are running into now is we have got what we call crypto exchanges that are coming around all over the country. They have to be approved by the SEC and FINRA, the two regulators.”
Tuberville continued, “We all know that they (China) are our number one adversary – the Republicans, the Democrats, people across the country, but somebody needs to tell our financial regulators because what has happened recently. There is a company, Promethium, that has been given the rights to a crypto exchange. Their biggest investor is Wanxiang which is a Communist China Party company. It is their biggest investor. What’s going on with our regulators? There was several dozen companies and people who applied for this, but they went with the Chinese Communist Party company.”
Tuberville and five congressional colleagues sent a letter to U.S. Attorney General Merrick Garland and Securities and Exchange Commission (SEC) Chair Gary Gensler requesting a review of inconsistencies in congressional testimony given by digital asset firm Prometheum, Inc.’s Co-CEO Aaron Kaplan and the company’s SEC filings.
Senator Tuberville announced the letter in an op-ed published by 1819 News.
“Lying to Congress is a crime. Providing misleading information to investors in SEC filings constitutes securities fraud,” said Sen. Tuberville. “…If Prometheum ended its tech buildout with its China-based partners in December 2019 as Mr. Kaplan led Congress to believe, that development should have been reflected in the company’s SEC filings. Instead, Prometheum continued to tout its China-tainted tech partnership to regulators and potential investors for nearly two more years.”
Prometheum’s largest outside investor is a China-based company – Shanghai Wanxiang Blockchain, Inc. (Wanxiang) and its subsidiary HashKey Digital Asset Group, Ltd. (HashKey)- with deep ties to the Chinese Communist Party (CCP) that were documented in a Wall Street Journal op-ed written by Senator Tuberville last month. HashKey holds a seat on Prometheum’s board, and until October 2021, Prometheum benefitted from a formal technology development agreement with its Chinese partners.
In written testimony submitted to Congress for a June 13 House Financial Services Committee hearing on the future of digital assets, Mr. Kaplan indicated Prometheum began developing its technology platform without influence from Wanxiang or HashKey in December 2019. Tuberville claims that SEC filings submitted by Prometheum throughout 2020 and for most of 2021 indicate the technology development partnership was still in force until October 2021. The letter sent to the Attorney General and the SEC Chair by Sen. Tuberville and his congressional colleagues requests a review of these inconsistencies.
Last month, Senator Tuberville sent an oversight letter to the SEC and the Financial Industry Regulatory Authority (FINRA), objecting to those agencies’ approval of Prometheum Ember Capital, LLC – a subsidiary of Prometheum, Inc. – as a special purpose broker-dealer to custody digital asset securities. Tuberville has requested an investigation.
Tuberville said that he and Senator Kirsten Gillibrand introduced legislation last week that will keep companies partly owned by the Chinese Communist Party from being able to invest in financial exchanges.
“That will keep out Chinese Communist Party investors out of crypto, out of our exchanges, but these regulators are asleep at the wheel,” Tuberville said. “It is just another thing that the Biden Administration has let the Chinese do and get by with, and we need to put a stop to it.”
Tuberville was elected to the Senate in 2020.
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