Prometheum Files Lawsuit Against Critic Matthew Blumberg Amidst Scam Accusations

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As a seasoned cryptocurrency investor with over two decades of market experience under my belt, I find myself torn between the principles of free speech and the potential for defamation in this case involving Prometheum and Matthew Blumberg.

Federally approved digital asset securities platform Prometheum has filed a defamation lawsuit against crypto commentator Matthew Blumberg.

The disagreement originated from a November 6th post on X, wherein the critic leveled allegations against the company for running an unauthorized commodities exchange without registration and for involving themselves in questionable activities with the United States Securities and Exchange Commission (SEC).

Free Speech or Defamation?

Prometheum’s complaint, filed in the New York Supreme Court, argues that Blumberg’s statements were false, baseless, and damaging to its reputation. Further, the company claimed that the crypto enthusiast sought to boost his public profile as an industry expert at its expense. The legal filing cites several of the analyst’s offending posts, including one where he stated:

These individuals, who are known scammers, appeared before Congress and read statements from the SEC, apparently as part of an agreement that granted them exclusive rights to obtain a broker-dealer license for trading cryptocurrency securities.

In the same message, Blumberg boasted about frequently criticizing Prometheum and urged the Commodity Futures Trading Commission (CFTC) to examine the company for suspected illegal operation of a commodities exchange, specifically regarding their handling of Ethereum.

In another post, the crypto watcher crowed over a possible implosion of the digital assets platform due to the impending departure of current SEC Chair Gary Gensler, whom he implied was some sort of protector of the firm.

According to Prometheum, these statements, along with others, weren’t just harmful but were intentionally crafted to fuel public mistrust. Moreover, the company stated that these comments damaged their reputation and negatively impacted their market presence.

Blumberg Fires Back

On the contrary, the analyst, backed by renowned legal counsel from Boies Schiller Flexner, has refuted the accusations and filed a motion to dismiss on December 16.

In the filing, he argued that his observations were foreclosed by New York’s anti-SLAPP laws, designed to protect individuals and entities from lawsuits intended to silence or intimidate them from exercising their free speech rights on matters of public interest.

The crypto enthusiast described his social media comments as “opinions about well-documented concerns” regarding the SEC’s dealings with Prometheum.

He additionally emphasized that the company was the initial and exclusive holder of a unique Special-Purpose Broker-Dealer (SPBD) crypto license from the SEC, which was granted just before one of its co-CEOs appeared before Congress to support the regulatory body. Many within the cryptocurrency community have often viewed this as a “favorable arrangement,” particularly since major players such as Coinbase and Robinhood have unsuccessfully attempted to secure the same license on multiple occasions.

Previously, New York Congressman Ritchie Torres had advocated for a probe into the conditions surrounding the acquisition of their SPBD license by the platform, as overseen by the financial regulatory authority.

Furthermore, Blumberg asserted that the company seemingly tried to intimidate him by reaching out to his mother. He stated they requested him to endorse their “innovative strategy in the crypto market,” but upon his refusal, they filed a lawsuit against him.

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2024-12-18 01:24