- SEC dismisses case after Cumberland DRW registration dispute.
- Cumberland DRW wins as SEC scales back crypto-related cases.
- The SEC ends lawsuit, signaling changes in crypto enforcement.
The U.S. Securities and Exchange Commission (SEC) has agreed to dismiss its lawsuit against crypto trading firm Cumberland DRW. The move follows a joint filing signed by both parties on March 4, after negotiations that began on February 20. This dismissal marks a shift in the SEC’s stance toward crypto-related enforcement actions.
SEC Dismisses Crypto Case Against Cumberland DRW
The case against Cumberland DRW started in 2024 where the SEC accused the company of operating as an unregistered securities dealer. The SEC claimed that Cumberland traded over $2 billion in crypto assets, some of which it classified as securities. The SEC argued that Cumberland dealt with tokens such as Polygon, Solana, Cosmos, Algorand, and Filecoin without proper registration.
Cumberland responded to the accusations and argued that it had registered as a dealer-broker in 2019. The company highlighted its extensive efforts to engage with the SEC for five years before the lawsuit was filed. Cumberland also expressed its frustrations for being unfairly targeted due to the SEC’s broader enforcement approach.
The lawsuit against Cumberland DRW centered around the claim that the company had engaged in the buying and selling of securities since March 2018. The SEC sought injunctive relief, civil penalties, and the disgorgement of alleged proceeds from the sale of securities. However, the joint filing for dismissal shows that the regulator and Cumberland DRW have reached an agreement on the issue.
SEC’s Shift in Regulatory Approach
This legal development is part of a broader trend of the SEC dropping some of its crypto-related lawsuits. The regulator previously dropped cases against major firms such as Coinbase, Kraken and ConsenSys. Moreover, the SEC recently closed investigations into NFT projects such as Yuga Labs and OpenSea, as well as exchanges such as Gemini and Uniswap Labs.
Cumberland DRW’s dismissal comes amid increased calls for the SEC to adjust its regulatory approach to the crypto industry. Although regulators continue to adjust their stance, companies within the sector still face challenges. However, Cumberland DRW has expressed satisfaction with the resolution and termed it a significant win.
The dismissal of the SEC case comes as major crypto firms continue to question the cost of regulatory enforcement. Coinbase has submitted a Freedom of Information Act request to understand the SEC’s expenditure on enforcement against the industry. The crypto industry will continue to monitor how the SEC handles future enforcement actions.