US SEC Charges Cumberland DRW With $2B Unregistered Crypto Sales

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As a seasoned researcher with years of experience in financial markets and regulatory compliance, I find the SEC’s charges against Cumberland DRW quite intriguing. It seems that the crypto market, despite its decentralized nature, is not immune to traditional securities laws.

The United States Securities and Exchange Commission (SEC) has accused Cumberland DRW LLC, based in Chicago, of functioning as an unlicensed broker in the digital currency trading market.

According to the SEC’s claim, the company is said to have conducted trades worth over $2 billion in digital currencies, which were marketed as investment contracts, but failed to register them as required by law. The complaint alleges that Cumberland breached federal securities regulations intended to safeguard investors.

US SEC Charges Cumberland DRW

As alleged by the U.S. Securities and Exchange Commission (SEC), Cumberland has been functioning as an unregistered broker since no later than March 2018. The company is under investigation for purchasing and selling digital assets classified as securities on behalf of its own accounts, which is a part of their routine business activities.

Additionally, the SEC claims that Cumberland boasts a global reputation as a top-tier liquidity provider within cryptocurrency markets, operating around the clock via both telephone and their self-developed digital trading platform, known as Marea.

According to the SEC, Cumberland frequently exchanges cryptocurrencies, which are regarded as investment contracts, on external platforms. This action, the lawsuit claims, falls under the category of a securities dealer, and Cumberland’s failure to register in this role is said to breach Section 15(a) of the Securities Exchange Act of 1934.

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2024-10-10 20:53