The U.S. Securities and Exchange Commission (SEC) has charged Chicago-based Cumberland DRW LLC with operating as an unregistered dealer in the cryptocurrency sector, citing more than $2 billion in transactions.
The company has described the allegations as an attempt to stifle innovation, saying regulatory measures stifle competition.
Alleged violations:
According to the SEC complaint, Cumberland has been buying and selling cryptocurrencies deemed to be securities without the required registration since March 2018.
The Authority also accused the company of operating as an unregistered dealer, executing transactions on its own account through foreign exchanges and its own platform, âMarea.â
Company response:
Cumberland has denied the allegations, saying it has been in good faith talks with the agency for five years, providing extensive documentation and data, and opening up interviews with senior officials.
The company added that the transactions in question did not require registration as a broker, and that the SEC had incorrectly classified some digital assets as securities.
Legal procedures:
The agency filed a lawsuit in the U.S. District Court for the Northern District of Illinois, accusing the company of violating Section 15(a) of the Securities Exchange Act of 1934, which requires registration of securities dealers.
The committee seeks a permanent injunction, recovery of profits from the illegal activities, interest and civil penalties.
In this context, Jorge Tenrero, Head of the Digital and Crypto Assets Unit at the Authority, stated that the complaint alleges that the digital assets in question were treated as investment contracts, which requires registration.
