SEC Drops Lawsuit Against Crypto Firm Cumberland DRW
1min read The U.S. Securities and Exchange Commission (SEC) has agreed to drop its lawsuit against Chicago-based crypto trading firm Cumberland DRW, according to a joint filing signed on March 4. The agreement, reached in principle between Cumberland DRW and SEC staff on February 20, is awaiting the agency's final approval.
The SEC's lawsuit, filed on October 10, 2022, alleged that Cumberland DRW operated as an unregistered securities dealer, handling over $2 billion in crypto assets since March 2018. The regulator claimed that five of the tokens Cumberland handled, including Polygon (POL), Solana (SOL), Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL), were securities. The SEC sought permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.
Cumberland DRW argued that it had registered as a dealer-broker in 2019 and had engaged in "five years of good-faith discussions" with the SEC. The firm criticized the SEC's enforcement-first approach, stating that it was "the latest target" of the regulator's actions aimed at stifling innovation.
This is the latest in a series of crypto-related lawsuits that the SEC has agreed to drop. In recent months, the regulator has also dismissed cases against crypto exchanges Coinbase and Kraken, as well as crypto firm ConsenSys. Additionally, the SEC has announced the closure of investigations into non-fungible token (NFT) companies Yuga Labs and OpenSea, and crypto exchange Gemini and Uniswap Labs.
Cumberland DRW expressed its enthusiasm for continuing its dialogue with the SEC to help shape a future where technological advancements and regulatory clarity can coexist. The firm's willingness to engage with the regulator suggests a commitment to fostering a more collaborative relationship between the crypto industry and the SEC.
