- The SEC alleges Cumberland of functioning as an unregistered broker since 2018.
- Cumberland defends itself and refuses to make adjustments to its business operations.
- The firm stays confident in its compliance framework and regulatory adherence.
Chicago-based crypto market maker Cumberland, the latest target of the SEC, is pushing back against the regulator’s allegations. The SEC sued Cumberland on Thursday for allegedly operating as an unregistered dealer and selling over $2 billion in crypto assets. Cumberland responded by refusing to change its business operations and expressing confidence in its compliance framework.
SEC Alleges Unregistered Dealing, Cumberland Cites Years of Engagement
The Securities and Exchange Commission claims Cumberland has operated as an unregistered dealer since March 2018, buying and selling assets the SEC classifies as securities. The agency also stated that Cumberland traded securities as investment contracts through third-party exchanges.
However, Cumberland is fighting back against what it calls “overzealous regulators.” The company pointed to five years of engagement with the SEC, during which it provided numerous documents and summaries to support its claims against security transactions. Cumberland asserts that the SEC’s lawsuit is the first time these specific transactions have been questioned.
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Cumberland also discussed its 2019 registration as a broker-dealer, which followed SEC Chair Gary Gensler’s call to “just come in and register.” The market maker questioned the SEC’s registration guidance, citing the agency’s own statement that broker-dealer registration only applies to trading Bitcoin and Ethereum.
Crypto enthusiast MetaLawMan acknowledged Cumberland’s potential to fight the SEC in an X post. MetaLawMan noted that Cumberland’s parent company, DRW, is a “large, successful trading operation that has been around for over 30 years.”
In its statements against the SEC’s enforcement action, Cumberland reaffirmed its position. The platform emphasized its commitment to regulations while calling out the SEC’s shifting target. Cumberland also criticized the SEC’s regulatory guidance, stating, “This time, the SEC’s approach seems to be a game of Catch-22 where the ability to ‘come in and register’ is just a mirage.”
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