Prometheum embers burn
House Republicans led by House Financial Services (HFS) Chair Patrick McHenry (R, NC) are continuing to keep the pressure on any parties associated with the approval of Prometheum’s Special Purpose Broker-Dealer (SPBD) license for digital asset securities. Two new letters (dated August 9) were released by the Chair and 22 (HFS) Republicans yesterday asking The Securities and Exchange Commission (SEC) Chair Gary Gensler (see SEC letter) and Financial Industry Regulatory Authority (FINRA) CEO Robert Cook (see FINRA letter) about how the SPBD approval process worked.
In a press release, the HFS Republicans explain, “The lawmakers are demanding transparency regarding the approval process for Prometheum and raising questions about the risks to national security posed by Prometheum’s reported ties to the Chinese Communist Party.” See the press release.
Prometheum embers – history
This isn’t the first letter the SEC and Chair Gensler has received about the Prometheum process from Republicans -which received added attention when Prometheum CEO Aaron Kaplan appeared as a Democratic witness at a House Financial Services hearing on June 13.
On July 10, a letter by Senator Tommy Tuberville (R, AL) and five House Republicans sent a Congressional letter to Attorney General Merrick Garland and SEC Chair Gensler – appointees of the Democratic Biden Administration – requesting an investigation into Prometheum and Kaplan, suggesting Kaplan may have perjured himself with his testimony in front of Congress regarding his company’s CCP affiliation.
Some Democrats haven’t been happy with the “Prometheum situation,” either.
On July 13, Democrat Ritchie Torres (D, NY) sent a letter of his own on Prometheum to the Inspector General and the Government Accountability Office seeing a “political ploy” at work in the approval of Prometheum’s SPBD and demanding an investigation of the SEC’s process.
Singapore adds stablecoins
Singapore, one of the most progressive jurisdictions when it comes to crypto in the World today, announced yesterday that it has finalized its new regulatory framework for stablecoins.
The Monetary Authority of Singapore (MAS), Singapore’s U.S. Treasury, explains in a press release, “MAS’ stablecoin regulatory framework will apply to single-currency stablecoins (SCS) pegged to the Singapore Dollar or any G10 currency, that are issued in Singapore. Issuers of such SCS will have to fulfil key requirements relating to:”
“Value stability: SCS reserve assets will be subject to requirements relating to their composition, valuation, custody and audit, to give a high degree of assurance of value stability.”
“Capital: Issuers must maintain minimum base capital and liquid assets to reduce the risk of insolvency and enable an orderly wind-down of business if necessary.”
“Redemption at Par: Issuers must return the par value of SCS to holders within five business days from a redemption request.”
“Disclosure: Issuers must provide appropriate disclosures to users, including information on the SCS’ value stabilising mechanism, rights of SCS holders, as well as the audit results of reserve assets.”
DLT and the Fed
On Monday, The Federal Reserve added micropayments platform Dropp to its list of 109 service providers for the new FedNow instant payments service. According to the Fed’s info page on Dropp, which is built on Hedera Hashgraph, “Dropp’s payment platform is built on a high throughput, low latency distributed ledger technology for instant payment execution.” See it.
What is hashgraph? – Wikipedia
Global mega-consultant McKinsey is serving up the tokenization kool-aid in a new article on its website titled, “Tokenization: A digital-asset déjà vu.”
The company says “given the potential benefits tokenization can bring to financial services, recent moves by leading incumbents suggest they may be up for the challenge, although it could take some time. Meanwhile, banks, asset managers, custodians, and others can take some no-regret moves today to prepare for this possibility of a tokenized world—the strategic optionality may be worth it after all.” Read more.
The man Congress can’t run away far enough from – former FTX CEO and Co-founder Sam Bankman-Fried (SBF) – was back in the news earlier this week as prosecutors filed a “superceding indictment” which included accusations such as this excerpt: “..to help fund over a hundred million dollars in campaign contributions to Democrats and Republicans to seek to influence cryptocurrency regulation.” See the filing on courlistener.com.
Gizmodo summarizes the latest SBF updates here and notes reports of 1 in 3 Members of Congress getting “dusted” with contributions by SBF. The former FTX CEO allegedly was looking to help steward the crypto legislation he wanted – often seen as the Digital Commodity Consumer Protection Act (DCCPA) begun in the Senate Agriculture Committee. Efforts behind DCCPA were effectively destroyed by SBF when revelations of his massive fraud first broke last November.
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Has Binance blown its chance to rule the crypto markets? – The Financial Times
PayPal’s outgoing CEO is bullish on crypto. What will be the company’s approach under Alex Chriss, owner of 2 Crypto Hippos NFTs? – Fortune