SEC Accuses Cumberland Crypto Trading Firm of Functioning as an Illicit Securities Dealer Without Registration

The United States Securities and Exchange Commission (SEC) is initiating litigation against the crypto trading entity based in Chicago, Cumberland, accusing the firm of functioning as a securities dealer without proper registration, involving crypto transactions exceeding $2 billion.

The legal filing contends that Cumberland, starting from March 2018, has been involved in the acquisition and disposal of crypto assets which are deemed as securities, an action that contravenes the registration provisions set by federal securities statutes.

The SEC states that Cumberland, self-described as a leading liquidity provider in the crypto world, conducts digital asset transactions with its partners either telephonically or via its proprietary trading portal Marea. The SEC’s indictment further asserts that the firm participates in the transaction of crypto securities on external exchange platforms.

Crypto Assets and Cyber Unit’s (CACU) interim leader at the SEC, Jorge G. Tenreiro, remarks,

“Notwithstanding the crypto industry’s persistent stance that crypto asset sales are tantamount to commodity transactions, our legal charge implies that for the assets addressed here, Cumberland, the associated issuers, and unbiased investors treated these transactions as securities investments. Cumberland profited from its dealer activities concerning these assets, bypassing the crucial investor and market safeguards registration entails.”

In reaction, Cumberland asserts that it stands as the most recent victim of the SEC’s aggressive enforcement strategy but is prepared to contest the allegations.

“We have made no modifications to our business practices or to the array of assets for which we facilitate liquidity following the SEC’s move. We believe in the robustness of our compliance system and our strict observance of all existing laws and guidelines—regulations that have historically been subject to change (not too long ago, ETH was purported to be a security).”

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