The SEC sued market maker Cumberland over the offering and sale of unregistered securities. Regulators say Cumberland violated U.S. securities laws by operating as an unregistered dealer.
The U.S. Securities and Exchange Commission has sued Cumberland DRW LLC, a Chicago-based cryptocurrency market maker, for acting as an unregistered securities dealer.
The SEC announced in a press release on October 10 that Cumberland violated securities laws by buying and selling $2 billion worth of crypto assets since March 2018. Regarding cryptocurrency regulation, the SEC states that the assets in question are “offered and delivered.” sold as securities. ”
investment securities
According to the press release, Cumberland offers these crypto assets through its own accounts, which means the company operates as an unregistered dealer, the SEC added.
The authorities' complaint against market makers also notes that Cumberland describes itself as a “major liquidity provider” and trades with counterparties over the phone and online platform Marea.
“Despite frequent protests by the industry that all sales of crypto assets are akin to sales of goods, our complaint confirms that Cumberland, their respective issuers, and objective investors are It alleges that it treated the offering and sale of the crypto assets at issue as an investment in the SEC, Jorge G. Tenreiro, acting head of the SEC's Crypto Assets and Cyber Division, said in a statement.
Tenreyro added that Cumberland has profited from these activities, but does not provide investors or the broader market with the important protections afforded by regulatory registration.
SEC seeks permanent injunction against Cumberland
In a complaint filed in the U.S. District Court for the Northern District of Illinois, the SEC alleges violations of Section 15(a) of the Securities Exchange Act of 1934.
In its claim, it seeks a permanent injunction against Cumberland. Crypto platforms should also be stripped of all ill-gotten gains and faced civil penalties.
The SEC's case against Cumberland comes a day after U.S. prosecutors indicted 14 people and four cryptocurrency companies on charges of market manipulation and fraud. On October 10, Ripple also filed a cross-appeal following the regulator's decision to appeal the case against Ripple.
Earlier this week, Crypto.com sued the SEC after the regulator issued a Notice of Wells to the cryptocurrency exchange.
