Prometheum Files Lawsuit Against Critic Matthew Blumberg Amidst Scam Accusations

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

The dispute stems from a November 6 post on X, where the critic accused the firm of operating “an illegal unregistered commodities exchange” and engaging in shady dealings with the U.S. 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:

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

In the same post, Blumberg bragged about “constantly talking sh*t” about Prometheum while calling on the Commodity Futures Trading Commission (CFTC) to investigate the company for allegedly unlawfully operating a commodities exchange with regard to its custody 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.

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

Blumberg Fires Back

However, the analyst, supported 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 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 also reiterated that the firm was the first and only recipient of a special-purpose broker-dealer (SPBD) crypto license from the SEC, issued right before one of its co-CEOs testified before Congress in favor of the regulator. Many in the crypto community have long considered this a “sweetheart deal,” especially given how prominent players like Coinbase and Robinhood have not been able to acquire the same license despite trying on numerous occasions.

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.

Additionally, Blumberg claimed that the company had contacted his mother in an apparent bid to bully him through her. He said they wanted him to sign a statement extolling their “innovative approach to crypto markets,” but when he refused, they sued.