The U.S. Securities and Exchange Commission (SEC) has charged Cumberland DRW LLC for acting as an unregistered dealer in cryptocurrency transactions involving a staggering $2 billion. The Chicago-based company, which identifies itself as a liquidity provider, risk taker, and latency-sensitive trading firm, was informed of these charges on Thursday.
The SEC stated that Cumberland conducted its activities without proper registration, which is essential for protecting investors. Jorge G. Tenreiro, acting chief of the SEC’s Crypto Assets and Cyber Unit, emphasized that despite industry claims likening crypto asset sales to commodity sales, Cumberland treated these transactions as investments in securities and profited without adhering to the necessary legal protections.
This case highlights ongoing regulatory scrutiny in the cryptocurrency space, as the SEC continues to ensure compliance with U.S. securities laws. The actions taken against Cumberland DRW may serve as a warning to other firms engaging in similar activities.
