The US Securities and Exchange Commission is backing off from its legal battle with Cumberland DRW, months after accusing the Chicago-based crypto trading firm of operating as an unregistered securities dealer.
In a March 4 post on X, Cumberland disclosed it had signed a joint filing with the SEC to dismiss the lawsuit following an agreement reached on Feb. 20.
Today we signed a joint filing to be made with the Securities and Exchange Commission (SEC) dismissing its case against Cumberland DRW. The filing was agreed in principle between Cumberland DRW and SEC staff on February 20 and is currently pending Commission approval. As a firm…
“The filing was agreed in principle between Cumberland DRW and SEC staff on February 20 and is currently pending Commission approval,” the Chicago-based market marker said, adding that the move was a step toward better cooperation between regulators and the crypto industry.
Cumberland vowed to work with the agency “to help shape a future where technological advancements and regulatory clarity go hand in hand,” as it hopes to ensure that the US remains at the forefront of global financial innovation.
Larry Florio, a general counsel at crypto investment firm 1Kx, welcomed the development as a “refreshing step away from the prior regime’s bad faith attempt to destroy the industry.”
Under former SEC chair Gary Gensler, the agency has been accused of waging war against the crypto industry by insisting all tokens distributed fall under securities. The result of such enforcement actions left those working in the US in legal limbo, which President Donald Trump is currently rolling back.
For Cumberland, the SEC accused the firm of trading more than $2 billion worth of crypto assets without registering as a securities dealer in an October 10 lawsuit filed in 2024.
According to the regulator, Cumberland has been acting as an unregistered dealer since 2018, conducting trades through its Marea trading platform and OTC deals over the phone.
It argued that at least five tokens traded by Cumberland, namely Polygon, Solana, Cosmos, Algorand, and Filecoin, were securities and sought permanent injunctive relief, disgorgement of profits, prejudgment interest, and civil penalties.
Cumberland, however, dismissed these allegations and pointed out that it registered as a dealer-broker in 2019, calling out the lawsuit as just another example of the regulator’s “enforcement-first approach to stifling innovation.”
SEC drops crypto lawsuits
This isn’t the first time the SEC has walked away from a crypto lawsuit. In recent months, the regulator has dropped cases against several major crypto industry players that had been battling the agency over the past years.
As previously reported by Invezz, Yuga Labs, the company behind the Bored Ape Yacht Club (BAYC) NFTs, recently confirmed that the SEC had closed its investigation into the firm, ending a long-running probe which began in October of 20233.
Last week, it closed its case against MetaMask after reaching an agreement with Consensys, the company behind the popular crypto wallet.
Other firms that have been relieved from the SEC’s scrutiny include Coinbase, Kraken, Gemini, Uniswap Labs, and OpenSea.
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