- SEC has sued market maker Cumberland over providing and sale of unregistered securities.
- The regulator says Cumberland violated the US securities legal guidelines by working as an unregistered supplier.
The US Securities and Trade Fee has sued Cumberland DRW LLC, a Chicago-based crypto market maker, for performing as an unregistered securities supplier.
SEC stated in a press launch on Oct. 10 that Cumberland had violated the securities legal guidelines by shopping for and promoting of over $2 billion price of crypto belongings since March 2018. By way of crypto regulation, the SEC says the belongings in query had been “offered and sold as securities.”
Funding securities
In accordance with the press launch, Cumberland offered these crypto belongings by way of its personal accounts, the SEC added, which meant the corporate operated as an unregistered supplier.
The company’s cost towards the market maker additionally notes Cumberland’s description of itself as a “leading liquidity provider”, and traded with counterparties by way of phone or its on-line platform Marea.
“Despite frequent protestations by the industry that sales of crypto assets are all akin to sales of commodities, our complaint alleges that Cumberland, the respective issuers, and objective investors treated the offer and sale of the crypto assets at issue in this case as investments in securities,” Jorge G. Tenreiro, performing chief of the SEC’s crypto belongings and cyber unit, stated in a press release.
Tenreiro added that Cumberland profited from these actions however didn’t present traders and the broader market the essential protections that registration with the regulator affords.
SEC seeks everlasting injuction towards Cumberland
In a criticism filed on the US District Courtroom for the Northern District of Illinois, SEC alleges violation of Part 15(a) of the Securities Trade Act of 1934.
In its argument, it desires a everlasting injunction towards Cumberland. The crypto platform also needs to forfeit all ill-gotten good points, and be slapped with a civil penalty.
SEC’s lawsuit towards Cumberland come a day after US prosecutors charged 14 folks and 4 crypto firms over market manipulation and fraud. Oct. 10 additionally noticed Ripple file a cross-appeal following the regulators choice to enchantment its case towards Ripple.
Earlier this week, Crypto.com sued the SEC after the regulator issued a Wells Discover to the crypto alternate.