- The SEC charged Cumberland with operating as an unregistered dealer in the virtual currency market.
- Action comes as part of broader SEC effort following similar accusations against companies like Coinbase
The U.S. Securities and Exchange Commission (SEC) has charged virtual currency market maker Cumberland with operating as an unregistered dealer.
The SEC alleged that the company has been buying and selling crypto assets without proper registration since March 2018. According to the SEC, Cumberland has ignored regulatory requirements despite SEC Chairman Gary Gensler's call for crypto companies to “register.”
Regulators have stated that Cumberland is expressly prohibited from using its registered broker-dealer status for virtual currency activities, and although that status is currently dormant, Cumberland continues to operate in the virtual currency space. It is claimed that
The SEC's action against Cumberland is part of a broader effort to tighten regulatory control over the U.S. cryptocurrency market. It closely monitors virtual currency companies' compliance with securities laws, with a particular focus on companies operating without the required registration.
Cumberland's case highlights the SEC's position on crypto market makers operating outside the regulatory framework and underscores the SEC's efforts to bring these entities under its jurisdiction.
SEC Increased Oversight of Cryptocurrency Industry
The SEC's charges against Cumberland come amid a series of regulatory actions targeting the crypto industry. In recent months, the SEC has taken significant steps to crack down on unregistered activity in the industry.
Earlier this year, the agency indicted virtual currency exchange Bittrex for allegedly failing to register as a broker, clearinghouse, and exchange.
In a similar move, the SEC filed a lawsuit against Coinbase for operating as an unregistered broker and exchange, and Gensler said all virtual currency entities engaged in securities-related activities must comply with registration requirements. emphasized the need to
These actions are part of a broader strategy by the SEC to assert regulatory control over the U.S. crypto market.The agency's approach has raised concerns within the crypto community, with many industry leaders Businesses overseas argue that an emphasis on execution is stifling innovation and promoting the spread of cryptocurrencies.
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However, the SEC maintains that the measure is necessary to protect investors and ensure that crypto assets are subject to the same rules as traditional financial products.
