Key Points:
- The SEC has accused Cumberland DRW of operating as an unregistered securities dealer, trading over $2 billion in digital assets since 2018.
- In the Cumberland DRW lawsuit, the SEC seeks to recover profits from these trades and impose penalties.
The SEC filed against Cumberland DRW, the cryptocurrency trading wing of DRW Holdings, alleges that it traded more than $2 billion worth of cryptocurrencies on an unregistered brokerage.
Read more: SEC Wells Notice Is Causing a Lawsuit With Crypto.com
Cumberland DRW Lawsuit with SEC for Unregistered Crypto Trading
In a complaint filed in an Illinois federal court, the SEC alleged that Cumberland flouted investor protection laws, amassing millions of dollars from incessant trading of digital assets since 2018. The firm had allegedly traded in crypto assets said to be securities, including Polygon’s MATIC, Solana (SOL), Algorand (ALGO), and Filecoin (FIL).
The SEC said Cumberland DRW traded cryptocurrencies around the clock on its website, Marea, for more than 1,500 high net worth customers and entities. Among the customers were several cryptocurrency investment firms and hedge funds now out of business.
In the Cumberland DRW lawsuit, the SEC’s complaint seeks to have the firm return the profits it made from these sales, pay civil penalties and bar them from future securities law violations.
Wider SEC Enforcement Aims at Crypto Industry Giants
Cumberland DRW, one of the desks that came into prominence for cryptocurrency trading, was established in 2014 as part of DRW Holdings.
Cumberland DRW lawsuit was part of a wider effort by the SEC to rein in the cryptocurrency market. Major players, including Kraken, Coinbase and Uniswap, have been on the receiving end of similar enforcement actions. Meanwhile, the SEC has been unwilling to greenlight new crypto investment products, Solana ETF, apparently because of its ongoing tussles with the crypto firms over regulations.
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