SEC Charges Crypto Trading Giant Cumberland DRW in Latest Regulatory Crackdown
The United States Securities and Exchange Commission (SEC) has tightened its oversight of the cryptocurrency industry, filing securities charges against leading trading firm Cumberland DRW. The Chicago-based crypto trader, accused of operating as an unregistered dealer, allegedly processed over $2 billion worth of digital assets that the SEC considers securities.
In the complaint filed Thursday, the regulator identified five cryptocurrencies by name— Solana, Polygon, Cosmos, Algorand, and Filecoin—as securities, but said its list was "non-exhaustive."
According to the SEC's Crypto Assets and Cyber Unit Acting Chief, Jorge G. Tenreiro, though industry players have since made representations that their crypto assets are no different from commodities, the complaint alleges that Cumberland, issuers, and investors treated those assets no differently from a securities investment.
"Cumberland profited from its dealer activity without providing investors and the market with the essential protections that come with registration," said Tenreiro in the release.
The trading firm came out swinging in response to the charges via social media, stating it wouldn't change its business operations or the assets in which it provides liquidity. Cumberland, the crypto trading arm of investment firm DRW, invoked its successful defense against a 2018 Commodities and Futures Trading Commission lawsuit, saying, "We're ready to defend ourselves again."
The action against Cumberland DRW thus follows a spate of the SEC's enforcement steps meant for key players within the digital asset space. This case comes hot on the heels of complaints filed against top U.S. cryptocurrency exchanges, such as Coinbase and Kraken, over similar violations related to unregistered securities.
