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Prometheum Founder Predicts SEC Victory In Ripple Lawsuit, XRP Community Responds

Eli Dambel 2023-06-16 23:15

Founder and CEO of crypto brokerage firm Prometheum Aaron Kaplan’s support for the SEC in a recent Daily Drop episode stirred the Ripple community’s reaction. In the interview, Kaplan said the United States Securities and Exchanges Commission would win in the Ripple lawsuit.

He likened the ongoing Ripple lawsuit to the SEC‚Äôs legal battle against LBRY Credits, noting that the judge ruled in the commission‚Äôs favor. 

Kaplan’s View On Ripple Lawsuit

The SEC filed a suit against the content distribution decentralized blockchain platform LBRY Credits in March 2021. The regulator alleged that LBRY violated securities law by offering unregistered LBC tokens.

However, the SEC won the lawsuit after the judge ruled in the agency’s favor. And Prometheum founder Kaplan argued that the SEC lawsuit against Ripple shares a similar cause of facts, noting that he expects the same outcome.

‚ÄúI anticipate the SEC will win this case as every indication points to a decision in the commission‚Äôs favor,‚ÄĚ said Kaplan.

Ripple Community’s Reaction

Kaplan’s projection sparked a reaction from several XRP community members who slammed the CEO for his remarks. Most XRP community members charged at Kaplan said he is biased for only highlighting the similarities between the two lawsuits, leaving out the differences.

One XRP community member said:

Is it just me, or does @PrometheumInc CEO Aaron Kaplan look like the ‚Äėposter child‚Äô for Hucksters, fraudsters, and scam artists?

CryptoLaw Attorney John Deaton’s crypto-focused legal and regulatory news outlet also weighed in and shared a similar sentiment with the broader XRP community. He noted that Kaplan doesn’t seem to understand anything about the XRP lawsuit except cheering the SEC with erroneous arguments.

Deaton said;

Very odd. Nothing about the cases cited nor even the Hinman speech itself or the warnings he got from the SEC staff about the speech support the notion that the token is a security.

Kaplan’s Support For SEC Regulatory Policies

Meanwhile, it‚Äôs not the first time Kaplan would support the SEC. The CEO has repeatedly expressed support for the commission‚Äôs regulatory approach. 

Kaplan openly supported the SEC chair Gary Gensler’s regulatory policies while speaking at the House Financial Services Committee hearing on June 13.

The House Committee on Financial Services held a hearing to discuss the right approach to regulate digital assets on June 13, and Kaplan was among the witnesses who spoke at the event.

The CEO reiterated his support for the SEC’s stand that the existing securities laws are adequate to regulate the crypto industry. Kaplan’s testimony in the SEC’s favor at the hearing drew people’s attention to him and his brokerage firm.

Ripple

Notably, amid the SEC’s aggressive enforcement action, Prometheum received approval for a first-ever Special Purpose Broker-Dealer (SPBD) for digital asset securities.

Based on that, the Blockchain Association filed a Freedom of Information Act (FOIA) request with the SEC on June 15, seeking information about Prometheum and other related records.

Featured image from Pixabay and chart from Tradingview.com