SEC Initiates Legal Action Against Crypto Trading Company Cumberland Regarding Alleged Unregistered Securities Trading

The United States Securities and Exchange Commission (SEC) has initiated legal action against the crypto trading entity Cumberland DRW based in Chicago, alleging that the company has been dealing in securities without proper registration.

Amid a wave of regulatory enforcement, the SEC is targeting crypto entities like Kraken, Binance, and Ripple Labs. This time, the lesser-known yet influential Cumberland is under the regulator’s lens.

Cumberland DRW, part of the DRW Trading Group, holds a substantial position as a liquidity provider in the crypto sector since its inception in 2014. The firm operates in trading key cryptocurrencies like Bitcoin, Ether, Solana, and Polygon across major platforms, ensuring price stability and assisting institutional traders with volume transactions.

Source: SEC

Cumberland has been charged by the SEC this Thursday for dealing over $2 billion in cryptocurrencies without the necessary dealer registration. The SEC’s complaint highlights that Cumberland executed trades in crypto assets considered investment contracts and those identified by the SEC as securities, such as Solana and Polygon.

Cumberland Refutes Allegations

Rejecting the accusations, Cumberland maintains its innocence, citing ongoing negotiations with the SEC since 2019. The firm contends that while it complied with registering as a dealer-broker for Bitcoin and Ether, there has been no clear direction from the SEC concerning additional tokens till the present.

Cumberland boldly asserts it will continue its business as usual and has geared up for a legal confrontation if needed.

Source: Cumberland

The outcome of the SEC vs. Cumberland case could set precedence affecting other crypto sectors’ actors that are currently not registered with the SEC. Cumberland’s stance is reminiscent of other organizations like Crypto.com who have also legally contested the SEC’s demands.

With the SEC expanding its scope, the future regulatory framework for digital assets within the United States is carefully being observed by the wider crypto economy awaiting these judicial determinations.