US SEC Drops Lawsuit Against Cumberland DRW
Highlights:
- SEC has ended investigations into Cumberland DRW security law violation claims.
- The filing for the lawsuit withdrawal is awaiting the commission’s approval.
- Cumberland DRW became the latest entity to be free from the SEC saga amid the growing lawsuit termination trends.
Cumberland DRW, a diversified trading platform under DRW, announced on Tuesday that it reached an agreement with the United States Securities and Exchange Commission (SEC) to end the lawsuit against it. The case dismissal became the latest in the series of dropped lawsuits and investigations into crypto-related firms by the regulatory agency.
According to Cumberland DRW’s announcement on X, the exchange signed a joint filing with the SEC, marking an official end to their legal dispute. “The filing was agreed in principle between Cumberland DRW and SEC staff on February 20 and is currently pending Commission approval,” Cumberland DRW added.
The exchange also noted that while it continues to anticipate the SEC’s approval, it remains committed to continuing its dialogue with the regulatory watchdog to ensure that the SEC rolls out only rules that support technological advancements. With this, Cumberland DRW believes the United States can comfortably remain at the forefront of global financial innovation.
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…
— Cumberland (@CumberlandSays) March 4, 2025
Origin of the SEC Vs. Cumberland DRW Lawsuit
The legal dispute between the regulatory body and Cumberland DRW dates back to October 2024. Crypto2Community captured the lawsuit in an old publication, revealing that the SEC had sued the Chicago-based trading platform for operating unregistered security dealers. The SEC’s lawsuit also alleged that Cumberland DRW realized over $2 billion from sales classified as securities since March 2018.
Part of the SEC’s argument stated that the exchange facilitated the sales of five cryptocurrencies deemed securities by the agency. These digital assets included Polygon (MATIC), Solana (SOL), Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL). The SEC emphasized that enabling the transactions of the highlighted cryptocurrencies via its platform Marea and over the phone violated the federal security laws protecting traders.
In addition, the regulatory agency argued that Cumberland DRW’s unprecedented expansion to become one of the main liquidity providers in the crypto market further strengthened the allegations against the trading platform. In its filing, presented to the U.S. District Court for the Northern District of Illinois, the SEC sought civil punishments for Cumberland DRW. These include disgorgement of the illicit gains, permanent injunctive relief, prejudgement interest, etc.
Cumberland DRW’s Response to the SEC’s Allegation
In response to the commission’s claims, Cumberland DRW argued that the SEC allegations invariably imply that it is against innovation. The trading platform also noted that with such stringent rules, the SEC is reducing companies’ crypto participation.
Stressing further, Cumberland DRW stated that it does not plan to modify its services to align with the SEC’s claims. In addition, the exchange disclosed it is ready to defend itself, citing confidence in its ability to engage with the SEC at any height the regulatory body intends to take the legal dispute.
— Cumberland (@CumberlandSays) October 10, 2024
Growing Trend of Lawsuit Dismissals by the SEC
The past few days saw the SEC terminate a reasonable number of legal disputes against crypto platforms. The regulatory agency ended investigations into crypto firms like Gemini, OpenSea, Robinhood Crypto Yuga Labs, and Coinbase. Meanwhile, like Cumberland DRW, ConsenSys, and Kraken are waiting for approval from the commissioners overseeing their filings for lawsuit termination.
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Chinedu Agbakwusi
Chinedu Agbakwusi is a news writer and editor for Crypto2Community. He is a crypto enthusiast with vast experience across several crypto-related projects and platforms. Chinedu has been following the development of the crypto market for several years, and he is optimistic about its potential to democratise the global financial system. He hopes to be a reliable plug for reporting trends and breaking down complex concepts to his readers. Agbakwusi's previously written for several crypto news including Times Tabloid, UPay, while also contributing over the years to many others leading media publications.
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