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"The caveat: SIPC will NOT cover Prometheum’s so-called “digital asset securities” because they do not fall under SIPA’s definition of a security. SIPA says that in order to be considered a security, an asset must be registered with the SEC." Another giant L for the SEC https://t.co/WSa12BtdaG
I also love that the SIPA specifically excludes the following from the definition of "security" in addition to unregistered investment contracts: "Except as specifically provided above, the term "security" does not include any currency, or any commodity or related contract or… https://t.co/C95Ea0ERE3
🚨UPDATE: @PrometheumInc has added a disclaimer to its website that says @sipc will not cover digital asset securities traded on its platform that are not registered with the @SECGov. https://t.co/74Ux7zNc22 https://t.co/MtadgXfLGg
Prometheum Inc., a firm previously approved by the SEC and FINRA as a special purpose broker-dealer (BD) and criticized as a Gary Gensler proxy, has come under scrutiny for potentially violating Securities Investor Protection Corporation (SIPC) requirements and raising concerns over investor protection. Despite the SEC's approval, the lack of additional guidance has led to increased risk of investor confusion and obfuscation. Prometheum, amidst allegations of non-compliance and CFIUS violation suspicions based on letters from Congress, has been criticized for its stance that all tokens are securities. In response to these concerns, Prometheum added a disclaimer on its website indicating that digital asset securities traded on its platform, which are not registered with the SEC, will not be covered by SIPC. This situation highlights the urgent need for clear crypto legislation to define regulatory status and ensure investor protection.
