The U.S. Securities and Exchange Commission (SEC) charged Cumberland DRW with operating as an unregistered dealer.
The SEC alleges that Cumberland sold more than $2 billion in crypto assets since 2018 without complying with federal registration requirements.
The SEC's complaint focuses on Mr. Cumberland's activities as a self-employed trader and his trades on third-party crypto exchanges. The agency is seeking permanent injunctive relief, disgorgement of benefits, prejudgment benefits, and civil penalties against the company.
According to the SEC, five tokens traded by Cumberland, Polygon (MATIC), Solana (SOL), Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL), are considered securities. The complaint states that Mr. Cumberland operated as a securities dealer without registering under Section 15(a) of the Securities Exchange Act of 1934.
Meanwhile, Cumberland said it registered as a dealer/broker in 2019, but the registration only covered Bitcoin (BTC) and Ether (ETH), not the other tokens in question. It turned out that it was not. Cumberland noted that he has been consulting with the SEC on this issue for five years, and said this case is the first time the SEC has specifically identified the transactions at the center of the allegations.
Cumberland also issued a defiant statement on social media, guaranteeing that the SEC's actions will not affect the company's business operations or the assets that provide liquidity. “We are ready to defend ourselves again,” the company said, positioning itself as the latest target of the SEC's increased scrutiny of digital assets.
Cumberland State isn't the only state pushing back against the SEC. Earlier this week, Crypto.com filed suit in a Texas district court seeking declaratory and injunctive relief against the agency. Following Wells' notice from the SEC indicating impending legal action, the exchange sought a court ruling that it was not a securities broker-dealer under the Exchange Act.
Crypto.com argues that this decision was taken without a proper legal framework and lacks a consistent basis, given that many other crypto transactions are similar to those involving BTC and ETH. I am doing it.
This move by Crypto.com follows similar notices issued to other prominent companies in the cryptocurrency space, including OpenSea, Coinbase, Kraken, and Robinhood, as the SEC focuses on regulating digital assets. It is.
