The United States Securities and Exchange Commission (SEC) filed suit against Cumberland DRW on October 10, 2024, alleging the company operated as an unregistered dealer. Cumberland has reportedly sold over $2 billion in crypto assets since 2018, violating federal registration requirements.
The SEC claims that Cumberland engaged in proprietary trading and transactions on third-party exchanges without proper registration, seeking permanent injunctive relief, disgorgement of profits, prejudgment interest, and civil penalties.
Cumberland responded, asserting it registered as a dealer-broker in 2019, but only for Bitcoin and Ether, claiming ongoing discussions with the SEC for five years. The company stated it would not alter its business operations in light of the lawsuit.
This case highlights the SEC's increasing scrutiny of digital asset firms, as Cumberland joins other companies like Crypto.com, which recently sued the SEC after receiving a Wells notice regarding potential legal action.