SEC agrees to drop lawsuit against Cumberland DRW, says firm

The US Securities and Exchange Commission will dismiss its case against the Chicago-based Cumberland DRW, the crypto trading firm says.

“Today we signed a joint filing to be made with the Securities and Exchange Commission (SEC) dismissing its case against Cumberland DRW,” Cumberland wrote in a March 4 X post. 

Cumberland said the filing was agreed in principle between Cumberland DRW and SEC staff on Feb. 20 and is currently awaiting the agency’s approval. 

It’s the latest crypto-related lawsuit the SEC has agreed to drop. It has previously dropped cases against crypto exchanges Coinbase and Kraken, along with crypto firm Consensys.

The regulator has also recently announced it had dropped its investigation into non-fungible token (NFT) companies Yuga Labs and OpenSea, and crypto exchanges Gemini and Uniswap Labs.

“We look forward to continuing our dialogue with the SEC to help shape a future where technological advancements and regulatory clarity go hand in hand,” Cumberland added. 

Related: Yuga Labs says SEC has dropped its investigation into the NFT firm

The SEC sued Cumberland DRW on Oct. 10, alleging a single charge of operating as an unregistered securities dealer for more than $2 billion in crypto assets. 

The regulator claimed Cumberland acted as an unregistered dealer since March 2018 by buying and selling crypto it deemed to be securities. 

The SEC also claimed that five of the tokens that Cumberland handled were securities, including Polygon (POL), Solana (SOL), Cosmos (ATOM), Algorand (ALGO) and Filecoin (FIL).

The agency was seeking permanent injunctive relief, disgorgement of ill-gotten gains, prejudgment interest and civil penalties.

Cumberland argued it had registered as a dealer-broker in 2019 and was hit with the suit despite engaging in “five years of good-faith discussions” with the SEC, adding it was just “the latest target” of SEC’s “enforcement-first approach to stifling innovation.”

Crypto exchange Coinbase recently filed a request under the Freedom of Information Act (FOIA) to the SEC seeking to discover how much the SEC spent on enforcement action against crypto firms. 

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