New York, Friday, October 11, 2024-The US Securities and Exchange Commission (SEC) has filed a lawsuit against crypto market maker Cumberland DRW, accusing the firm of operating as an unregistered securities dealer. The SEC alleges that Cumberland traded over $2 billion in crypto assets, which should have been registered as securities, since 2018.
Cumberland promoted investments in these assets through research reports and updates, positioning them as promising opportunities. The SEC contends that Cumberland, as well as the issuers and investors, treated these assets as securities, violating federal regulations by not registering as a securities dealer.
Jorge G. Tenreiro, acting chief of the SEC’s Crypto Assets and Cyber Unit, emphasized the importance of registration for investor protection. The SEC has flagged several crypto assets, including Polygon, Solana, Cosmos, Algorand, and Filecoin, that were allegedly traded illegally by Cumberland.
Cumberland has denied the SEC’s claims, asserting its adherence to compliance standards and its belief that the firm followed all applicable regulations. “We remain confident in our compliance framework and will not alter our operations,” the firm said in a statement.
The lawsuit against Cumberland is part of the SEC’s broader effort to regulate the crypto market, which has seen increasing scrutiny. Other high-profile cases include Ripple Labs, Block.one, and Crypto.com, which recently sued the SEC after receiving a Wells Notice.
This lawsuit follows the SEC’s ongoing legal campaign to establish stronger oversight of the crypto market, targeting firms for unregistered securities activities. Cumberland’s case could signal further enforcement actions in the near future.
