SEC Files Charges Against Cumberland for Operating as Unregistered Securities Dealer

Cumberland Under Fire 

Since March 2018, Cumberland has allegedly provided dealer services in the cryptocurrency market without registering. During that period, the SEC asserts that the company made over $2 billion in unreported sales. Cumberland responded by releasing a strong statement in which he claimed that the SEC was going too far.  

Cumberland brought up a recent House Financial Services Committee meeting. Participants in that discussion called the SEC a “rogue agency.” The company emphasized its prior compliance endeavors, mentioning that it became a registered broker-dealer in 2019. According to Cumberland, the SEC only permitted it to trade Ethereum and Bitcoin, which are tokens governed by the CFTC. 

Cumberland described the SEC’s push to register as a “Catch-22” situation. The firm contends that the agency’s demands are contradictory. It also noted that it has provided data and access to the SEC for years, yet now faces accusations of violations spanning six years. Cumberland’s frustration mirrors a similar conflict with Crypto.com, which recently received a Wells Notice from the SEC. 

Crypto.com’s Battle 

In a preemptive move, Crypto.com sued the SEC before any formal charges were filed. The company accused the agency of “regulation by enforcement.” It suggested that the SEC’s actions respond to increasing bipartisan support for crypto in the U.S. Congress. 

Both Cumberland and Crypto.com argue that SEC Chair Gary Gensler’s stance—that most crypto assets are securities—is unfeasible for the industry. 

Future of Crypto at Stake 

The SEC’s charges against Cumberland do not specify individual unregistered securities transactions. Instead, they challenge the broader classification of crypto assets as commodities. Crypto.com and Cumberland believe this case could shape the future of the crypto industry and its regulatory framework.