SEC charges Cumberland DRW for unregistered securities trading in $2B case
SEC costs Cumberland DRW for unregistered securities shopping and selling in $2B case SEC costs Cumberland DRW for unregistered securities shopping and selling in $2B case
The market maker claims that it would possibly perhaps perchance perchance well presumably also no longer exchange the framework for its operations following the regulator costs.
Quilt art/illustration by strategy of CryptoSlate. Image entails combined exclaim that would possibly perhaps well even consist of AI-generated exclaim.
The Securities and Alternate Commission (SEC) charged Chicago-primarily primarily based crypto market maker Cumberland DRW for allegedly running as an unregistered securities seller on Oct. 10.
Fixed with the SECâs criticism, Cumberland has traded over $2 billion in crypto categorised as securities since no decrease than March 2018.
The agency alleges that these actions, performed thru Cumberland’s shopping and selling platform Marea and over the phone, violated federal securities legal pointers intended to guard patrons.
Jorge G. Tenreiro, performing chief of the SEC’s Crypto Assets and Cyber Unit, stated:
âThe federal securities legal pointers require all dealers in all securities to register with the Commission, and americans that feature in the crypto asset markets are no exception.â
Tenreiro additionally addressed the crypto neighborhood’s claims that tokens desires to be treated as commodities, arguing that Cumberland’s actions treated the sale and provide of crypto as securities, necessitating registration to substantiate investor safety.
Furthermore, the criticism highlighted that the corporate’s self-described feature as a number one liquidity provider in the crypto market adds weight to these claims.
Since the alleged violations, the SEC seeks eternal injunctive reduction to conclude these actions, the disgorgement of income Cumberland allegedly gained unlawfully, plus prejudgment hobby and civil penalties.
Fixed with Cumberland’s net location, the firm offers liquidity for over-the-counter (OTC) markets for diversified cryptocurrencies, including stablecoins, as well to crypto derivatives and bilateral shopping and selling of crypto forwards.
Cumberland responds
In a commentary posted on X, Cumberland claimed that the SEC is attempting to stifle innovation and cease corporations from enticing in crypto.
The market maker stated that it wouldn't exchange its operations following the enforcement inch by the US regulator. Cumberland added:
âWe're confident in our accurate compliance framework and disciplined adherence to all acknowledged principles and regulationsâat the same time as they possess been a transferring target (it wasnât formula support ETH became once claimed to be a security).â
The anecdote additionally highlighted that Cumberland got a dealer-seller registration in 2019 thru SEC Chairman Gary Gensler’s guidance. It extra states that the market maker became once warned that the license is handiest precise for Bitcoin (BTC) and Ethereum (ETH) shopping and selling.
Additionally, Cumberland stated that it has been in talks with the regulator for the past 5 years about its operations, which contains sharing written summaries and statements, as well to interviews with the firm’s personnel.
Fixed with Cumberland:
âTodayâs criticism is the predominant time the SEC has outlined the actual transactions at grief.â
Severely, the anecdote additionally cited the market manipulation costs levied by the Commodity Futures Procuring and selling Commission (CFTC) in opposition to DRW in November 2013, when Gensler served as its Chair.
The case concluded in December 2018, with Circuit Possess Richard Sullivan ruling that the CFTC did no longer explain that DRW manipulated the market and its claims possess been “primarily primarily based on diminutive higher than an ‘earth is flat’-trend conviction.”
Cumberland stated the SEC’s latest inch reveals that registering as a dealer-seller for digital assets in the US is “only a mirage” and reaffirmed its intention to fight the lawsuit.
Virtually $100 million in assets
Cumberland currently holds over $81.5 million in crypto, with most of the funds â $44.2 million â held in Bitcoin, primarily primarily based on Arkham Intelligence data.
The market maker additionally holds almost $24 million in ETH and over $12 million in stablecoins divided between Tether USD (USDT) and USD Coin (USDC).
Additionally, Cumberland holds $6.3 million in AAVE and almost $9 million in cUNI, which would possibly perhaps be UNI tokens staked on the cash market Compound, primarily primarily based on Nansen data.
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Bitcoin 
Ethereum 
Aave 
Uniswap 
Compound 
Arkham Intelligence 
Nansen 
Tether Restricted 
Uniswap 
Gary Gensler
Gino Matos
Gino Matos is a law college graduate and a seasoned journalist with six years of abilities in the crypto alternate. His abilities primarily specializes in the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his abilities worldwide for over a decade. Specializing in monetary journalism, he now specializes in crypto reporting.
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Bitcoin, a decentralized currency that defies the sway of central banks or directors, transacts electronically, circumventing intermediaries by strategy of a understand-to-understand community.
Ethereum is a decentralized, originate-source blockchain platform that enables the introduction of good contracts and decentralized functions (DApps).
Aave is an originate source and non-custodial protocol enabling the introduction of money markets.
Since its inception, the Uniswap Protocol (“Uniswap”) has served as a trustless and highly decentralized monetary infrastructure.
Compound (COMP) is an ERC-20 asset that powers the neighborhood governance of the Compound protocol; COMP token-holders and their delegates debate, suggest, and vote on changes to the protocol.
Arkham Intelligence
Arkham Intelligence is a platform that offers data on the trusty-world entities in the support of addresses on the blockchain.
Nansen
Nansen is a blockchain analytics platform that enriches on-chain data with millions of wallet labels.
Tether Restricted
Tether Restricted is the corporate that introduced Tether (USDâ® or USDT), an asset-backed cryptocurrency stablecoin, in 2014.
Designed with simplicity in mind, the Uniswap protocol offers an interface for seamless alternate of ERC20 tokens on Ethereum.
Gary Gensler is an American govt legitimate and dilapidated funding banker who President Joseph Biden nominated to chair the U.S.
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