- The US SEC has agreed to drop the enforcement lawsuit against Cumberland DRW.
- Cumberland was accused of selling over $2 billion in crypto through unregistered securities.
- SEC has been dropping numerous cases and investigations against multiple crypto firms.
The US Securities and Exchange Commission has agreed to drop its case against the popular crypto trading firm Cumberland DRW. Through an X post, Cumberland stated that they have signed a “joint filing” with the SEC to dismiss the case. The filing was agreed in principle between Cumberland DRW and SEC staff on February 20 and is currently awaiting SEC’s approval.
The Chicago-based crypto trading firm part of DRW, was charged last year for selling more than $2 billion in unregistered securities. The SEC named several tokens like Polygon (POL), Solana (SOL), Cosmos (ATOM), Algorand (ALGO), and Filecoin (FIL) as securities. In October 2020, Cumberland described Filecoin’s launch as “one of the biggest launches in the history of crypto assets” and in April 2021, the company highlighted a 100% price increase in Filecoin in just one week, encouraging investors to invest.
The SEC highlights this active promotion of tokens, as an act by Cumberland to position it as a lucrative investment. The agency sensed that these promotions would have for sure extended beyond simple strategies.
When the lawsuit was filed, Cumberland DRW CEO Don Wilson stated that the firm had tried and failed to register as a securities dealer with the SEC. He also pointed out the lack of clarity for crypto companies under Gary Gensler as an underlying issue.
Related: SEC Drops Broker-Dealer Rule Challenge: What’s Next for DeFi?
SEC’s Series of Dropping Lawsuits
The new Trump-selected SEC Chairman Mark Uyeda has changed the course completely. Before dropping the lawsuit against Cumberland, the SEC has closed multiple cases into popular crypto firms like Coinbase, Gemini, OpenSea, and Yuga Labs. Until now, the SEC has dropped at least 10 cases against crypto companies.
It is also widely speculated that the SEC will next abandon its appeal against Ripple. Former SEC official John Reed Stark backs this by stating in his X post. Further, Trump’s announcement on the Strategic Crypto Reserve which included XRP could also signal a shift in stance on the SEC’s Ripple case. However, these series of dropped cases hints at a question: Is the SEC’s policies too strict during Gary Gensler’s ruling or is it too lenient in Mark Uyeda’s ruling? It is something that time will ultimately answer.
