SEC Sues Crypto Trading Firm Cumberland, Again Alleges Solana and Polygon Are Securities

The U.S. Securities and Exchange Commission In an announcement, the SEC said that Cumberland operated as an unregistered dealer in handling more than $2 billion worth of cryptocurrencies. The complaint alleges that Cumberland traded “crypto assets that are offered and sold as investment contracts on third-party crypto asset exchanges.”The SEC complaint mentions five assets that the regulator considers to be securities, including “Despite frequent protestations by the industry that sales of crypto assets are all akin to sales of commodities, our complaint alleges that Cumberland, the respective issuers, and objective investors treated the offer and sale of the crypto assets at issue in this case as investments in securities,” said Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit (CACU), in a statement.“Cumberland profited from its dealer activity in these assets without providing investors and the market with the important protections afforded by registration,” Tenreiro added.Cumberland did not immediately respond to “We’re ready to defend ourselves again,” it added, referring to a Cumberland is the crypto trading subsidiary of Chicago-based investment firm DRW. It specializes in making institutional-sized markets in Bitcoin and other digital assets.The SEC has hit a number of digital asset firms—including major American exchanges But the approach has attracted the ire of those in the industry and some U.S. politicians, who claim the regulator and its Chair Gary Gensler have adopted a “regulation by enforcement” approach to watchdogging the industry.Edited by Andrew HaywardEditor’s note: This story was updated after publication with additional details.