SEC Charges Chicago-Based Firm for Unregistered Crypto Securities Transactions
The U.S. Securities and Exchange Commission (SEC) has filed charges against Cumberland DRW LLC, a firm based in Chicago, for engaging in unregistered dealings in over $2 billion worth of crypto assets that are classified as securities. The SEC alleges that Cumberland violated federal securities laws by failing to register, raising concerns about the protection of investors. The charges seek both injunctive relief and penalties.
The SEC’s complaint states that Cumberland has been involved in the buying and selling of crypto assets classified as securities since at least March 2018 without the necessary registration. The company, known for its role as a major liquidity provider in the crypto market, conducts its operations through phone transactions and its platform, Marea. The SEC also claims that Cumberland’s trading activities include transactions involving investment contracts on third-party crypto exchanges. Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit (CACU), emphasized the importance of all dealers in securities, including those in the crypto asset markets, registering with the Commission.
Additionally, the SEC highlighted that Cumberland has profited from its dealer activity in these assets without providing investors and the market with the important protections that come with registration. The SEC’s complaint charges Cumberland with violating Section 15(a) of the Securities Exchange Act of 1934 and seeks permanent injunctive relief, disgorgement, prejudgment interest, and civil penalties.
What are your thoughts on the SEC’s actions against Cumberland DRW for unregistered crypto asset dealings? Let us know in the comments section below.
