2024-10-14
The SEC is suing the Chicago-based market maker Cumberland. This is according to a press release published by the US Securities and Exchange Commission.
The allegation: Cumberland is an unregistered trader in cryptocurrencies that are offered and sold as securities.
"Under the federal securities laws, all dealers in securities must register with the Commission. Those who operate in crypto markets are no exception," said Jorge G. Tenreiro, acting head of the SEC's Crypto Assets and Cyber Unit (CACU).
Cumberland is the subsidiary of DRW Trading Group that specialises in cryptocurrencies. As one of the larger market makers and liquidity providers - as the company publicly describes itself - Cumberland facilitates institutional investments in cryptocurrencies.
Cumberland is also a major client of Tether, the issuer of the largest US stablecoin (USDT) on the crypto market. The market maker thus not only helps with price stability, but is also responsible for the increased activity on the crypto market.
Cumberland responded to the lawsuit with a declaration of war: "We are not changing the way we do business [...] and are prepared to defend ourselves."
The SEC's crackdown on crypto companies is not only being criticised in the crypto scene. There are also disagreements within the authority. In an interview with Fox Business, SEC Commissioner Mark Uyeda described the authority's approach to crypto as ‘a disaster for the entire industry.’
If Donald Trump is elected US President - the odds are currently 55 to 43 per cent in favour of the Republican - the SEC's anti-crypto regulatory course is likely to change.
After all, Trump wants to reshuffle the SEC, which is supported by President Biden, with a pro-crypto chairman at the helm by "firing Gary Gensler on day one."
Read here whether this is even possible: Donald Trump's Bitcoin promise fact check
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