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SEC Sues Cumberland for Unregistered Crypto Trading, Firm Vows to Fight Back

11.10.2024 9:30 2 min. read Alexander Stefanov
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SEC Sues Cumberland for Unregistered Crypto Trading, Firm Vows to Fight Back

On October 10, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Cumberland DRW, accusing the firm of operating as an unregistered dealer.

Since 2018, Cumberland has reportedly conducted over $2 billion in crypto asset transactions without adhering to federal registration rules.

The SEC’s complaint focuses on Cumberland’s proprietary trading and its activities on third-party crypto exchanges, claiming the firm should have been registered as a dealer. The agency is seeking an injunction, repayment of profits, interest, and financial penalties.

The SEC alleges that five of the tokens traded by Cumberland – Polygon (MATIC), Solana (SOL), Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL)—are considered securities under previous rulings. Cumberland, however, responded by stating that it had registered as a dealer-broker in 2019 but was informed later that the registration only applied to Bitcoin and Ether. Cumberland emphasized that it has been in ongoing discussions with the SEC for five years and that the current lawsuit marks the first time the agency has specifically identified the transactions in question.

In a defiant statement, Cumberland said it will not alter its operations or liquidity services, calling itself “the latest target” of the SEC’s regulatory stance on digital assets. The firm remains committed to defending itself against the charges.

Cumberland’s response mirrors a recent legal challenge from Crypto.com, which filed its own lawsuit against the SEC on October 8, seeking a ruling that it is not required to register as a securities broker-dealer under federal law.

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.

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