The US Securities and Exchange Commission (SEC) has charged Chicago-based firm Cumberland DRW with operating as an unregistered crypto asset dealer.
Jorge Tenreiro
Specifically, the watchdog concluded that Cumberland DRW had operated as an unregistered dealer since “at least March 2018 through to present” in more than $2 billion of crypto assets offered and sold as securities.
This was “in violation of the registration requirements of the federal securities laws that are designed to protect investors,” said the regulator in an official announcement.
Cumberland operates 24 hours a day, seven days a week and refers to itself one of the world’s leading liquidity providers in crypto assets.
“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,” said Jorge Tenreiro, acting chief of the SEC’s crypto assets and cyber unit (CACU).
“Despite frequent protestations by the industry that sales of crypto assets are all akin to sales of commodities, our complaint alleges that Cumberland, the respective issuers, and objective investors treated the offer and sale of the crypto assets at issue in this case as investments in securities, and Cumberland profited from its dealer activity in these assets without providing investors and the market with the important protections afforded by registration.”
The SEC’s complaint specifically charges Cumberland with violating section 15(a) of the Securities Exchange Act, seeking permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.