Prometheum files lawsuit against critic Matthew Blumberg amid scam allegations

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

The dispute stems from a Nov. 6 post in X, where the critic accused the company of operating “an unregistered illegal commodity exchange” and engaging in shady dealings with the Securities and Exchange Commission ( SEC) of the US.

Freedom of expression or defamation?

Prometheum’s lawsuit, filed in New York Supreme Court, argues that Blumberg’s statements were false, baseless and damaging to its reputation. In addition, the company claimed that the crypto enthusiast tried to raise his public profile as an industry expert at its expense. The legal filing cites several of the analyst’s offensive posts, including one in which he stated:

“They are the scammers who testified before Congress reading the SEC’s talking points in exchange for a sweetheart deal where they were the only ones able to get a broker’s license to trade crypto securities.”

In the same post, Blumberg bragged about “constantly talking shit” about Prometheum while calling on the Commodity Futures Trading Commission (CFTC) to investigate the company for allegedly illegally operating a commodity exchange in relation to its custody of Ethereum.

In another post, the crypto watchdog spoke out for a potential implosion of the digital asset platform due to the imminent departure of current SEC Chairman Gary Gensler, who he hinted was some sort of of protector of the company.

Prometheum claims that these statements, among others, were not only defamatory but also designed to stoke public distrust. The company also claimed that the comments have damaged its credibility and market share.

Blumberg fires back

However, the analyst, backed by prominent legal representation from Boies Schiller Flexner, has defended himself against the allegations, filing a countermotion to dismiss on December 16.

In the filing, he argued that his remarks were barred by New York’s anti-SLAPP laws, designed to protect individuals and entities from lawsuits aimed at silencing or intimidating them from exercising their free speech rights in matters of public interest.

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

He also reiterated that the company was the first and only recipient of a special purpose crypto broker-dealer (SPBD) license from the SEC, issued just before one of its co-CEOs testified before Congress in in favor of the regulator. Many in the crypto community have long considered this a “sweetheart deal,” especially considering how prominent players like Coinbase and Robinhood have been unable to acquire the same license despite numerous attempts.

Even New York Congressman Ritchie Torres previously called for an investigation into the circumstances under which the platform received its SPBD license from the financial watchdog.

In addition, Blumberg claimed that the company had contacted his mother in an apparent attempt to intimidate him through her. He said they wanted him to sign a statement touting his “innovative approach to crypto markets,” but when he refused, they sued.

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