The SEC is taking action against Cumberland, a major crypto trading firm, for allegedly operating as an unregistered securities dealer. The agency claims Cumberland has been buying and selling crypto assets that qualify as securities since 2018, generating over $2 billion in transactions.
SEC’s Claims
The SEC alleges that Cumberland, which boasts of being a top liquidity provider in the crypto world, has been trading digital assets with clients through phone calls and its online platform, Marea. They also accuse the firm of trading crypto securities on other exchanges.
Jorge Tenreiro, head of the SEC’s Crypto Assets and Cyber Unit, stated that “Despite the industry’s claims that crypto sales are like commodity sales, our complaint shows that Cumberland, the issuers, and investors treated these crypto assets as investments in securities.” He further emphasized that Cumberland profited from this unregistered activity without offering investors the protection of registration.
Cumberland’s Response
Cumberland has countered the accusations, calling the SEC’s actions an example of their “enforcement-first approach.” They claim to be confident in their compliance practices and adherence to regulations, despite the evolving nature of the crypto landscape.
“We are not changing our business operations or the assets we provide liquidity for,” Cumberland stated. “We believe in our strong compliance framework and adherence to all known rules and regulations, even though they’re constantly changing.”
This case highlights the ongoing debate over the classification of crypto assets and the SEC’s efforts to regulate the industry.
