Cumberland, a Chicago-based crypto market maker, is taking a firm stance against the SEC’s recent allegations. The SEC filed a lawsuit against Cumberland for allegedly operating as an unregistered dealer and selling over $2 billion in crypto assets. In response, Cumberland has refused to alter its business practices, emphasizing its confidence in its compliance framework.
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SEC Alleges Unregistered Dealing, Cumberland Highlights Engagement
The Securities and Exchange Commission has accused Cumberland of operating as an unregistered dealer since March 2018. The agency contends that the firm has effected the purchase and sale of assets captured under securities. Moreover, the SEC alleges that Cumberland conducted securities business by acting as an investment contract through third-party trading platforms.
Cumberland is contesting what it describes as “overzealous regulators,” citing five years of engagement with the SEC. During this period, Cumberland provided extensive documentation to support its stance on security transactions. The firm noted that the SEC’s lawsuit marks the first time these specific transactions have been questioned.
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The current chair of the SEC, Gary Gensler, encouraged the agency to “just come in and register,” so in 2019, Cumberland fulfilled that requirement. However, it was noted that Cumberland has taken the SEC registration guidance to task on this. The firm pointed out previous comments made by its agency when it stated that the registration of the firms is for the broker-dealer in Bitcoin and Ethereum only.
Several crypto enthusiasts, including MetaLawMan, emphasized that Cumberland has what it takes to go head-to-head with the SEC. He stressed that Cumberland is a DRW subsidiary and a registered trading company with over thirty years of experience.
Cumberland pledged allegiance to compliance while rebuking the SEC for its incongruity with the regulatory approach. The firm said what the SEC is now doing seems to be a game of catch-22. Cumberland opined that while the rationality of “come in and register” appears appealing to the court, it remains a mirage.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.