- 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 Alternate Fee has sued Cumberland DRW LLC, a Chicago-based crypto market maker, for appearing as an unregistered securities supplier.
SEC mentioned in a press release on Oct. 10 that Cumberland had violated the securities legal guidelines by shopping for and promoting of over $2 billion value 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 line with the press release, Cumberland supplied 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 in opposition to 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, appearing chief of the SEC’s crypto belongings and cyber unit, mentioned in an announcement.
Tenreiro added that Cumberland profited from these actions however didn’t present buyers and the broader market the essential protections that registration with the regulator presents.
SEC seeks everlasting injuction in opposition to Cumberland
In a criticism filed on the US District Court docket for the Northern District of Illinois, SEC alleges violation of Part 15(a) of the Securities Alternate Act of 1934.
In its argument, it needs a everlasting injunction in opposition to Cumberland. The crypto platform also needs to forfeit all ill-gotten beneficial properties, and be slapped with a civil penalty.
SEC’s lawsuit in opposition to Cumberland come a day after US prosecutors charged 14 individuals and 4 crypto corporations over market manipulation and fraud. Oct. 10 additionally noticed Ripple file a cross-appeal following the regulators choice to attraction its case in opposition to Ripple.
Earlier this week, Crypto.com sued the SEC after the regulator issued a Wells Discover to the crypto alternate.