The U.S. Securities and Exchange Commission (SEC) has charged Chicago-based cryptocurrency trading firm Cumberland with operating as an unregistered securities dealer in transactions involving more than $2 billion in virtual currency assets.
The complaint alleges that since March 2018, Cumberland has been buying and selling crypto assets offered and sold as securities as part of the ordinary course of its business, in violation of the registration requirements of federal securities laws. .
According to the SEC, Cumberland, which bills itself as one of the world's leading liquidity providers in cryptocurrencies, trades digital assets with counterparties over the phone and through its online trading platform Marea. According to regulators, the company also trades virtual currency securities on third-party exchanges.
Jorge G. Tenreiro, Acting Director of the SEC's Crypto Assets and Cyber Division (CACU), said:
“Despite frequent protests by the industry that all sales of crypto assets are akin to sales of goods, our complaint confirms that Cumberland, their respective issuers, and objective investors are It alleges that Cumberland treated the offering and sale of the crypto assets at issue as an investment in these assets without providing investors or the market with the important protections afforded by registration. profited from dealer activities.”
Cumberland said in a statement that he was the latest target of the SEC's enforcement-first approach, but that he was prepared to defend himself against the charges.
“As a result of this action by the SEC, we have not made any changes to our business operations or the assets that provide liquidity. We are confident in our strong compliance framework and disciplined compliance with all known rules and regulations.
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