Months after accusing Cumberland DRW of running an unregistered securities trading operation, the U.S. Securities and Exchange Commission has decided to drop the case.
In a March 4 X post, the Chicago-based crypto firm said it had signed a joint filing with the SEC to dismiss the lawsuit following an agreement reached on Feb. 20. The filing still requires formal approval from the agency, but Cumberland appears confident that the case is coming to an end.
Cumberland views the agency’s decision as a step toward better cooperation between regulators and the crypto industry and said it will continue discussions with the SEC to build a future where “technological advancements and regulatory clarity go hand in hand.”
Cumberland’s case was centered on allegations that it operated as an unregistered securities dealer, with the SEC accusing the firm of trading more than $2 billion in crypto assets without proper registration.
In its Oct. 10 suit against the firm last year, the commission said Cumberland carried out these trades through its proprietary trading platform, Marea, and over-the-counter deals conducted by phone. The agency also pointed to five specific tokens—Polygon, Solana, Cosmos, Algorand, and Filecoin—that it considered securities under federal law.
As part of its lawsuit, the SEC was going for permanent injunctive relief, disgorgement of profits, prejudgment interest, and civil penalties.
Cumberland, however, pushed back, arguing that it had registered as a dealer-broker in 2019 and had spent five years engaging in “good-faith discussions” with the SEC.
This marks yet another crypto case from which the SEC has walked away in recent months. Over the past weeks, the regulator has also dropped lawsuits against major exchanges like Coinbase and Kraken, as well as investigations into NFT players Yuga Labs and OpenSea. More recently, it ended probes into Uniswap Labs and Gemini.
In related developments, the SEC, led by Commissioner Hester, recently unveiled key personnel that would be a part of its Crypto Task Force. The new team is set to host roundtables to clarify the security status of digital assets, with the first session scheduled for March 21 at the agency’s Washington, D.C., headquarters.
