- The SEC has charged Cumberland DRW with operating as an unregistered dealer in the crypto asset markets
- The firm allegedly executed crypto transactions without proper registration, violating federal securities laws
- The SEC continues its focus on enforcing crypto asset regulations to ensure compliance across the industry
The U.S. Securities and Exchange Commission (SEC) has charged Cumberland DRW with operating as an unregistered dealer in the crypto asset markets. According to the SEC, the company executed transactions without proper registration, which violates the Securities Exchange Act of 1934. The agency alleges that Cumberland operated as an unregistered dealer in more than $2 billion of cryptocurrency assets it offered and sold as securities.
Cumberland Failed to Register
In a press release, the SEC highlighted that Cumberland acted as a dealer by engaging in regular crypto asset transactions for its own account. Firms operating in such capacity are required to register with the SEC to protect investors and maintain transparency in the market. “Registration is essential for investor protection and market integrity,” the SEC stated, reinforcing its stance on ensuring proper oversight of crypto activities.
This case against Cumberland reflects the SEC’s ongoing push to enforce crypto asset regulations more strictly. The agency has ramped up efforts in recent months, addressing what it sees as widespread recordkeeping failures and unregistered operations across the industry.
SEC Commissioner Admits to “Disaster”
This latest action underscores the importance of compliance in the rapidly evolving crypto space. As the SEC continues its efforts to regulate the industry, firms dealing with crypto assets are expected to closely follow federal securities laws or face similar enforcement actions. Gurbir S. Grewal, the SEC’s Director of Enforcement, emphasized, “Firms engaged in crypto activities must comply with the registration requirements, just like any other firm in the financial markets.”
Cumberland responded with an X post denying that it had broken the rules, alleging that it had tried its best to comply:
— Cumberland (@CumberlandSays) October 10, 2024
The charges come just days after SEC Commissioner Mark Uyeda admitted that the agency’s approach to the crypto sector had been a “disaster” and that it had offered no guidance to firms.
