As a seasoned financial analyst with over two decades of experience, I find myself increasingly intrigued by the ongoing saga between the U.S. Securities and Exchange Commission (SEC) and the crypto industry. The latest development, with the SEC charging Cumberland DRW LLC for operating as an unregistered securities dealer, is yet another instance that highlights the regulatory gray areas surrounding this dynamic sector.
The United States Securities and Exchange Commission has accused Cumberland DRW LLC of functioning illegally without being registered as a dealer.
As a regulatory analyst, I’m sharing information about a case where the SEC claims that Cumberland, a Chicago-based entity functioning as a cryptocurrency market maker, engaged in transactions worth over $2 billion in digital assets, some of which were classified as securities. The allegation is that they carried out these activities without adhering to the federal securities laws requiring registration.
As stated in the SEC’s lawsuit, it is alleged that Cumberland has been carrying out these activities since at least 2018, mainly through their trading platform, Marea, as well as by using the telephone.
The Securities and Exchange Commission (SEC) has accused Cumberland DRW LLC of functioning as an unlicensed broker in the securities market. [Credit to @inforacrypto for the information.]
— Dumpster DAO (@Dumpster_DAO) October 10, 2024
According to the SEC, Cumberland advertised itself as a significant source of market liquidity, dealing in numerous cryptocurrencies such as those linked to Polygon (MATIC), Solana (SOL), Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL).
According to the SEC’s announcement, it’s crucial to note that under federal regulations, any dealer, be it handling conventional securities or digital assets like cryptos, must be duly registered.
SEC vs. crypto
Under Gary Gensler’s leadership as SEC Chair, he has adopted a firm position towards the cryptocurrency sector, regarding it as riddled with deception and unlawful activities. This stance has resulted in several legal proceedings against crypto businesses, as he argues that numerous digital currencies should be classified as unregistered securities under the SEC’s purview.
This past week, SEC Commissioner Mark Uyeda voiced his disapproval of the commission’s strategy on cryptocurrency governance. Meanwhile, Crypto.com filed a lawsuit against the SEC due to a Wells notice claiming that their platform functioned as an unregistered broker-dealer and securities clearing agency.
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2024-10-10 21:02