- SEC charged Cumberland for operating as an unregistered dealer in the crypto market
- Action part of broader SEC efforts, following similar charges against firms like Coinbase
The U.S. Securities and Exchange Commission (SEC) has charged crypto market maker Cumberland with operating as an unregistered dealer.
SEC alleged that the company has been buying and selling crypto assets without proper registration since March 2018. According to the SEC, Cumberland has ignored regulatory requirements despite calls from SEC Chairman Gary Gensler urging cryptocurrency firms to “come in and register.”
The regulatory body claims that Cumberland was explicitly prohibited from using its registered broker-dealer status for crypto activities, which has now been dormant, but continued to operate in the crypto space nonetheless.
The SEC’s action against Cumberland is part of its broader efforts to tighten regulatory control over the U.S. crypto market. It has been scrutinizing crypto firms for compliance with securities laws, with a particular focus on companies that operate without the necessary registrations.
Cumberland’s case emphasizes the SEC’s stance on crypto market makers who operate outside regulatory frameworks, underscoring the agency’s commitment to bringing these entities under its jurisdiction.
Growing SEC scrutiny of the crypto industry
The SEC’s charges against Cumberland come amid a wave of regulatory actions targeting the crypto industry. In recent months, the SEC has taken significant steps to clamp down on unregistered activities within the sector.
Earlier this year, the agency charged crypto exchange Bittrex for allegedly failing to register as a broker, clearing agency, and exchange.
In a similar move, the SEC filed a lawsuit against Coinbase, claiming that it was operating as an unregistered broker and exchange, with Gensler emphasizing the need for all cryptocurrency entities engaging in securities-related activities to adhere to registration requirements.
These actions are part of a wider strategy by the SEC to assert regulatory control over the cryptocurrency market in the U.S. The agency’s approach has raised concerns within the crypto community, with many industry leaders arguing that the SEC’s enforcement-heavy stance stifles innovation and drives crypto businesses overseas.
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However, the SEC maintains that its actions are necessary to protect investors and ensure that crypto assets are subject to the same rules as traditional financial products.
