SEC Drops Lawsuit Against Cumberland DRW Following Joint Filing
- The SEC has agreed to dismiss its case against Cumberland DRW after a joint filing on March 4.
- The lawsuit alleged the firm operated as an unregistered securities dealer, handling $2 billion in crypto transactions.
The U.S. Securities and Exchange Commission (SEC) has decided to drop its lawsuit against Cumberland DRW, a Chicago-based crypto trading firm. Cumberland announced the dismissal in a March 4 post on X, confirming that both parties had agreed to a joint filing to terminate the case.
Background on the Lawsuit
The SEC initially sued Cumberland DRW in October 2023, accusing the firm of acting as an unregistered securities dealer. The regulator claimed that Cumberland had facilitated over $2 billion in cryptocurrency transactions, specifically involving tokens classified as securities by the SEC, including:
- Polygon (MATIC)
- Solana (SOL)
- Cosmos (ATOM)
- Algorand (ALGO)
- Filecoin (FIL)
In response, Cumberland asserted that it had already registered as a dealer-broker in 2019 and had engaged in five years of discussions with the SEC before being sued. The firm criticized the lawsuit, calling it part of the SEC’s aggressive enforcement strategy against the crypto industry.
SEC’s Regulatory Shift on Crypto
The SEC had initially sought permanent injunctive relief, profit disgorgement, prejudgment interest, and civil penalties. However, on February 20, Cumberland and SEC officials reached a preliminary agreement to dismiss the case, with final approval still pending.
This lawsuit joins a growing list of SEC cases against crypto firms that have been dropped. In recent months, the regulator has dismissed lawsuits against Coinbase and Kraken and closed investigations into Uniswap Labs, Gemini, Yuga Labs, and OpenSea.
Meanwhile, the SEC has established a Crypto Task Force, led by Commissioner Hester Peirce, to clarify the classification of digital assets as securities. The first roundtable discussion is set for March 21 at the SEC headquarters in Washington, D.C.
