Key Takeaways:
- SEC lawsuit: Cumberland DRW is accused of $2B in unregistered crypto transactions involving securities like MATIC, SOL, and ALGO since 2018.
- Cumberland’s defense: The firm claims it tried to register but found SEC’s guidance only applied to Bitcoin and Ethereum.
- Ongoing operations: Cumberland intends to continue its business without changes, signaling readiness to defend against the SEC’s allegations.
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Cumberland DRW, accusing the company of conducting over $2 billion in unregistered crypto transactions since 2018.
The SEC claims Cumberland acted as an unregistered securities dealer by trading tokens, such as Polygon (MATIC), Solana (SOL), Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL), all classified as securities by the agency.
JUST IN: 🇺🇸 SEC charged Cumberland DRW for operating as an unregistered dealer in over $2 billion of crypto assets sold as securities pic.twitter.com/yHv13dPfod
— BlockNews.com (@blocknewsdotcom) October 10, 2024
The SEC seeks injunctive relief, return of profits, interest, and civil penalties.
Cumberland responded that it had registered as a dealer-broker in 2019 but discovered later that the registration only applied to Bitcoin (BTC) and Ether (ETH).
— Cumberland (@CumberlandSays) October 10, 2024
The firm emphasized that it had engaged in good-faith discussions with the SEC for five years and remains firm in its operations, continuing to trade the same assets.
This lawsuit aligns with broader SEC enforcement actions against crypto firms, following similar legal moves like Crypto.com’s recent lawsuit against the agency.
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