The U.S. Securities and Exchange Commission (SEC) has filed a complaint against Cumberland DRW LLC, alleging that the Chicago-based cryptocurrency trading firm acted as an unregistered dealer in the sale of $2 billion worth of digital assets.
The SEC’s complaint, filed in the Southern District of New York, alleges that Cumberland DRW engaged in “dealer activity” in various cryptocurrencies, including Bitcoin and Ethereum, without registering with the SEC as a broker-dealer. The agency argues that the company’s actions violated Section 15(a) of the Securities Exchange Act of 1934.
“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,” said Jorge G. Tenreiro, acting chief of the SEC’s Crypto Assets and Cyber Unit.
The SEC’s action against Cumberland DRW is the latest in a series of legal challenges brought by the agency against cryptocurrency-related entities. The SEC has argued that many digital assets, including Bitcoin and Ethereum, should be classified as securities and subject to federal securities laws.
