SEC Charges Cumberland DRW as Unregistered Dealer

By Hannah Lang

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) charged crypto market maker Cumberland DRW on Thursday with acting as an unregistered dealer for more than $2 billion in crypto assets, the agency announced in a statement.

The SEC claims that Cumberland has operated as an unregistered dealer since March 2018 by buying and selling crypto assets deemed to be securities and trading them as investment contracts on third-party crypto exchanges.

> "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," stated Jorge G. Tenreiro, the acting chief of the commission's crypto assets and cyber unit.

A spokeswoman for Cumberland expressed that the charges are "incredibly frustrating and disappointing," stating:

> "Despite (SEC) Chairman (Gary) Gensler’s call to just 'come in and register,' Cumberland has for years been expressly prohibited from using its now-dormant registered broker-dealer for crypto asset activity. We cannot comply with rules that do not exist or a framework that regulators are interpreting to prohibit trading in natively issued crypto assets."

The SEC maintains that most cryptocurrency tokens are securities and subject to its registration rules, while many crypto firms contest this view and accuse the regulator of overreach.

The SEC is currently engaged in legal disputes with several crypto platforms, including Coinbase, Binance, and Kraken, all of which argue that crypto assets do not fulfill the definition of securities like stocks and bonds.