For years, the crypto industry has complained about the Securities and Exchange Commission’s hardline stance, and its refusal to develop rules that account for blockchain’s distinct technology. One firm, though, claimed the SEC’s current crypto rules are just fine. This stance has paid off as the firm, Prometheum, won a first-of-its-kind license for crypto-based securities and—despite being virtually unknown in the crypto world—landing a prestigious slot in 2023 to testify about digital assets before Congress.But now Prometheum has a problem. The election of pro-crypto Donald Trump has led SEC Chair Gary Gensler to announce he will quit his position early next year, so now the firm—whose apparent inside track with the regulator appeared to give it an edge—must compete in a world there the rules of the crypto game are shifting dramatically.Most notably, there is an emerging consensus that many cryptocurrencies will not be considered securities when Trump is president. This is different from the current regulatory environment, where SEC’s Gensler has signaled that every token other than Bitcoin is a security, and filed lawsuits that have forced companies to delist popular tokens like Solana and XRP. Since the election, however, firms like Coinbase and Robinhood have relisted those assets in anticipation of an incoming SEC Chair who will not treat those tokens as securities.This is a potential problem for Prometheum since its business model has been based in large part on selling itself as a platform where crypto tokens are securities, and obtaining the legal infrastructure to support that. It’s unclear where this leaves Prometheum, which has attracted widespread derision from crypto figures over its role as Gensler’s model for the industry. Meanwhile, the firm faces an incoming Congress controlled by hostile Republicans, including figures like John Rose (R-TN), who have accused it of having ties to China. Prometheum strongly denies that allegation.In response to questions from Fortune about Prometheum’s future in a post-Gensler world, the firm supplied written answers from Aaron Kaplan, who shares CEO duties with his brother.According to Kaplan, Prometheum has an opportunity to move beyond crypto and use its first-of-its-kind license (known as Special Purpose Broker Dealer) to offer a wide variety of assets, including “equities, debt instruments, structured products, options, ETFs, money market funds” and more in the form of securities on a blockchain.“We expect that President Trump’s administration will oversee this market transformation as trillions of securities are issued on a blockchain, ushering in the benefits that blockchain-technology has long promised market participants,” Kaplan wrote.Others are not so sure. Matt Walsh, a co-founder of the influential crypto venture capital firm Castle Island who has been an outspoken critic of Prometheum, told Fortune he has seen little in the way of evidence that anyone is using the firm’s platform for real world trading. And while financial giants like Goldman Sachs and BlackRock, alongside crypto native firms like Superstate, are dabbling in tokenized traditional assets, this remains for now a very niche area of finance.In response to a question about whether Prometheum can point to real world clients or other evidence of gaining traction in the market, Kaplan said the firm is still in “the very early stages” and that it is “actively engaged in discussions with financial institutions.”Learn more about all things crypto with short, easy-to-read lesson cards. Click here for Fortune's Crypto Crash Course.
