According to ChainCatcher, the U.S. Securities and Exchange Commission (SEC) sued Cumberland DRW, claiming that it operated as an unregistered securities dealer. According to the SEC's prosecution information, Cumberland has been acting as an unregistered dealer to buy and sell crypto assets as securities for its proprietary accounts since March 2018.

In response, Cumberland DRW issued an announcement on the X platform stating: “The SEC believes that some of our transactions involving certain crypto assets are securities transactions. We took this step in 2019 and acquired a registered broker-dealer. It was not until then that we were told that we could only use our broker-dealer to trade BTC or ETH (both commodities and not subject to SEC jurisdiction).”

Cumberland DRW said that the SEC's action would not make any changes to its business operations or the assets it provides liquidity for. The court's charges against DRW are "simply based on a 'flat earth' type conviction." This time, the SEC's approach appears to be a game of "Catch-22" and the ability to "come in and register" is just a mirage. We are ready to defend ourselves again.