Cumberland DRW sued by SEC for unlicensed securities broker, Solana ETFs at danger

SEC accused Cumberland DRW of being an unlicensed broker.

The SEC accused the site of selling five cryptocurrencies as securities, including Solana.

Solana ETF approval is unlikely as the SEC still considers SOL a securities.

On Thursday, the SEC sued Chicago-based Cumberland DRW for acting as an unregistered securities dealer. The action named Solana (SOL), for which financial companies have filed ETFs, among other cryptocurrencies.

SEC sues Cumberland DRW, Solana ETF potentially delayed
In the Northern District of Illinois, the SEC accused crypto trading business Cumberland DRW with unlawful securities trading. The suit claims the business traded over $2 billion in bitcoins.

The SEC alleges that Cumberland has been an unlicensed broker since 2018. The SEC also claims Cumberland traded bitcoins as investment contracts on third-party exchanges as part of its business.

“The federal securities laws require all dealers in all securities to register with the Commission, and crypto asset market operators are no exception,” stated Jorge G. Tenreiro, SEC Crypto Assets and Cyber Unit Acting Chief.

The regulator wants all cryptocurrency sales profits disgorged. They require the court to ban securities law violations and impose civil money fines on the business.

Cumberland DRW said it has always followed regulators' regulations in response to the accusations.

Therefore, the corporation said it will not modify its business operations.

Cumberland also labeled the SEC's move "Enforcement-first approach in stifling innovation." It also claims an SEC-mandated broker-dealer registration from 2019.

In the litigation, the SEC included Polygon's MATIC (now POL), ATOM, Algorand (ALGO), Filecoin (FIL), and Solana as securities.

Despite investor interest in a Solana ETF, the SEC has maintained to call Solana a security. VanEck submitted a Solana ETF slot on June 27 and 21 Shares on June 28.

These will be the first US Solana ETFs to provide spot bitcoin prices if authorized.

#SOL #SEC