Cumberland DRW LLC, a firm based in Chicago, has been charged by the U.S. Securities and Exchange Commission (SEC) for engaging in unregistered dealings of over $2 billion worth of crypto assets classified as securities. The SEC alleges that Cumberland violated federal securities laws by failing to register, which raises concerns about the protection of investors. The charges aim to obtain injunctive relief and penalties.
SEC Takes Legal Action Against Cumberland DRW for Unregistered Crypto Securities Transactions
On Thursday, the U.S. Securities and Exchange Commission (SEC) brought charges against Cumberland DRW LLC, a Chicago-based firm, for "conducting unregistered transactions involving more than $2 billion worth of crypto assets that were offered and sold as securities." The regulatory body claims that Cumberland violated federal securities laws by engaging in significant transactions of crypto assets without the required registration, thereby jeopardizing investor protections.
According to the complaint filed by the SEC, Cumberland has been involved in the buying and selling of crypto assets classified as securities since at least March 2018 without proper registration. The company, which is known as a prominent liquidity provider in the crypto market, conducts its operations consistently through phone transactions or its platform, Marea. The SEC further alleges that Cumberland's trading activities include transactions related to investment contracts on third-party crypto exchanges. Jorge G. Tenreiro, the Acting Chief of the SEC's Crypto Assets and Cyber Unit (CACU), emphasized:
"The federal securities laws mandate that all dealers in securities, including those operating in the crypto asset markets, must register with the Commission."
Furthermore, the SEC stated: "Cumberland profited from its dealer activities in these assets without providing investors and the market with the crucial protections offered by registration."
The SEC's complaint, filed in the U.S. District Court for the Northern District of Illinois, charges Cumberland with violating Section 15(a) of the Securities Exchange Act of 1934. The complaint seeks permanent injunctive relief, disgorgement, prejudgment interest, and civil penalties.
What are your thoughts on the SEC's actions against Cumberland DRW for engaging in unregistered dealings of crypto assets? Share your opinions in the comments section below.