The U.S. Securities and Exchange Commission (SEC) has moved to dismiss its lawsuit against Cumberland DRW, a Chicago-based trading firm, over allegations of operating as an unregistered dealer in the crypto asset market.
The dismissal, agreed upon in principle on February 20, 2025, is currently pending Commission approval.
“Today we signed a joint filing to be made with the Securities and Exchange Commission (SEC) dismissing its case against Cumberland DRW,” the firm stated in a March 4 post on X.
SEC’s Original Allegations Against Cumberland DRW
The legal dispute began on October 10, 2024, when the SEC charged Cumberland DRW with violating Section 15(a) of the Securities Exchange Act of 1934. Notedly, the agency alleged that since at least March 2018, Cumberland had acted as an unregistered dealer by engaging in the purchase and sale of crypto assets deemed to be securities, accumulating over $2 billion in transactions.
According to the SEC’s complaint, Cumberland conducted these transactions via its online platform, Marea, and through direct counterparty trading.
The agency further claimed that Cumberland facilitated the trading of cryptocurrencies, including Polygon (MATIC), Solana (SOL), Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL), which the SEC considers investment contracts.
“The federal securities laws require all dealers in all securities to register with the Commission, and those who operate in the crypto asset markets are no exception,” said Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit. The SEC sought civil penalties, disgorgement of profits, and injunctive relief in its lawsuit.
Cumberland’s Response and Broader Industry Implications
Cumberland DRW denied the SEC’s allegations, arguing that the charges reflected a broader regulatory approach that stifles innovation in the cryptocurrency sector.
Notably, the firm maintained that its operations did not violate securities laws and expressed confidence in engaging with the SEC to defend its practices.
The recent decision to dismiss the case aligns with a broader trend of the SEC dropping legal actions against several crypto-related firms.
In recent weeks, the regulatory body has ended investigations into companies such as Gemini, OpenSea, Robinhood Crypto, Yuga Labs, and Coinbase. Meanwhile, other entities like ConsenSys and Kraken await SEC approval for their lawsuit dismissals.
Read Also: SEC Closes Investigation Into Robinhood Crypto, No Action to Be Taken
With the withdrawal of this case, Cumberland DRW becomes the latest firm to escape the SEC’s increasing scrutiny over crypto market participants. However, regulatory uncertainty remains a significant challenge, with the industry closely watching how the SEC proceeds with enforcement actions against digital asset firms.
