The US Securities and Exchange Commission (SEC) has stepped up its regulatory scrutiny of the crypto industry by charging Cumberland DRW LLC with operating as an \u201cunregistered dealer\u201d, underscoring the agency\u2019s relentless enforcement approach that has come under increasing criticism from stakeholders and advocates in the digital asset space.<\/p>\n
In a statement <\/a>released on Thursday, the SEC revealed that Chicago-based Cumberland DRW is accused of trading over $2 billion in crypto assets offered and sold as alleged \u201csecurities\u201d in violation of federal registration requirements designed to protect investors.\u00a0<\/p>\n The SEC\u2019s complaint alleges that Cumberland has been engaging in these activities since at least March 2018, acting as an \u201cunregistered dealer\u201d by buying and selling <\/a>crypto assets for its own accounts as part of its regular business operations.<\/p>\n According to the firm\u2019s website<\/a>, it provided \u201cdeep, reliable liquidity\u201d in crypto assets, as well as investing in technology, claiming to have decades of experience in the field.\u00a0<\/p>\n Cumberland DRW has publicly positioned itself as \u201cone of the world\u2019s leading liquidity providers\u201d in the digital asset market, operating around the clock and executing trades with counterparties via telephone and its online platform, Marea.\u00a0<\/p>\n Cumberland also offered spot cryptocurrency liquidity, and operations for \u201cdozens\u201d of cryptocurrencies, including stablecoins, for institutional investors<\/a> in the market. Other services offered by the company included options and futures trading, bilateral crypto options, and non-deliverable forwards.\u00a0<\/p>\n The SEC further alleges that Cumberland has been trading crypto assets treated as investment contracts<\/a> on third-party exchanges. Jorge G. Tenreiro, Acting Chief of the SEC\u2019s Crypto Assets and Cyber Unit, stated:\u00a0<\/p>\n The federal securities laws require all dealers in all securities to register with the Commission, and those who operate in the crypto asset markets are no exception.\u00a0<\/p>\nSEC Seeks Penalties Against Cumberland DRW<\/h2>\n