Winklevoss Criticizes SEC’s Double Standard On Crypto Exchanges
Tyler Winklevoss, the co-founder of New York-compliant cryptocurrency exchange Gemini, has publicly criticized the Securities and Exchange Commission (SEC) for what he perceives as a double standard in its treatment of cryptocurrency exchanges. While the SEC has filed legal actions against major exchanges like Binance, Coinbase, Gemini, and Kraken, alleging non-compliance with security laws, it has given approval to Prometheum, a lesser-known crypto exchange.
SEC criticized for suing Coinbase, Gemini, Binance, and other cryptocurrency exchanges but approving the less known Prometheumhttps://t.co/2xFNcwgKiv
— crypto.news (@itscrypto_news) June 18, 2023
Prometheum’s Lack of Product Releases
Winklevoss raised concerns about Prometheum, noting that despite operating for over six years, the exchange has yet to release any products. This lack of progress and fulfillment of commitments has left some questioning its capability and reliability. Moreover, the employment of several former SEC and Financial Industry Regulatory Authority (FINRA) staff members at Prometheum has raised eyebrows as an uncommon occurrence.
Another point of skepticism is the hiring of a chief technology officer (CTO) reportedly based in the Isle of Man, who has little to no discernible online presence. This lack of visibility further contributes to doubts surrounding the exchange, according to Winklevoss.
Critics, including Adam Cochran, have highlighted these factors as red flags for investors and the wider cryptocurrency community. They argue that Prometheum, touted by the SEC as a paragon of compliance, must deliver on its promises. Although some may dismiss these concerns as conspiracy theories, a growing belief suggests that the SEC’s relationship with Prometheum may involve more than meets the eye.
12/23
Who is Network 1 Financial?
A shady broker with a Chinese affiliated firm and a horrible compliance track record of more than 20 regulatory or civil actions against them.
(h/t @MattWalshInBos) pic.twitter.com/litDWvticX
— Adam Cochran (adamscochran.eth) (@adamscochran) June 15, 2023
Favoritism or Balanced Approach?
In February 2023, the SEC granted Prometheum approval as a special purpose broker-dealer (SPBD), allowing it to engage in cryptocurrency trading. Prometheum intends to utilize its SPBD status to offer various services such as custody, trading, and clearing, while also collaborating with regulators to establish a more comprehensive regulatory framework for the crypto industry.
However, the SEC’s seemingly lenient approach towards Prometheum, combined with its stricter actions against prominent exchanges like Coinbase, has sparked concerns about potential underlying motivations. Critics argue that despite doubts regarding Prometheum’s historical performance, alleged ties with China, and past regulatory issues, the SEC appears to treat the exchange favorably. These contrasting approaches have raised questions and increased skepticism within the industry.
