Crypto Trading Firm Cumberland DRW Announces SEC Will Dismiss Its Case Against the Firm

The U.S. Securities and Exchange Commission (SEC) is set to dismiss its case against Cumberland DRW, the Chicago-based crypto trading firm said in a statement.

The U.S. Securities and Exchange Commission (SEC) is set to dismiss its case against Cumberland DRW, the Chicago-based crypto trading firm said in a statement on Friday.

“Today we signed a joint filing to be made with the SEC dismissing its case against Cumberland DRW,” the firm announced in a post on X. The agreement was reached in principle on Feb. 20 and is now awaiting formal approval from the agency.

This marks another case the SEC has chosen to drop in the crypto space. The regulator has recently abandoned legal action against Coinbase (NASDAQ:), Kraken, and Consensys, as well as investigations into NFT companies Yuga Labs and OpenSea, and crypto exchanges Gemini and Uniswap Labs.

The SEC originally sued Cumberland DRW in March, accusing it of operating as an unregistered securities dealer and trading over $2 billion in crypto assets without proper registration.

The SEC’s allegations focused on Cumberland’s activities as a proprietary trader and its trading on third-party crypto asset exchanges.

According to the agency, five tokens traded by Cumberland—Polygon (CRYPTO:MATIC), Solana (CRYPTO:SOL), Cosmos (CRYPTO:ATOM), Algorand (CRYPTO:ALGO), and Filecoin (CRYPTO:FIL)—were considered securities. The complaint states that Cumberland acted as a securities dealer without registering as required under Section 15(a) of the Securities Exchange Act of 1934.

The SEC sought injunctive relief, disgorgement of gains, prejudgment interest, and civil penalties. Cumberland countered that it registered as a broker-dealer in 2019 and had been in good-faith discussions with the SEC for five years before the lawsuit. The firm criticized the SEC’s “enforcement-first approach” to crypto regulation.

In a follow-up statement, Cumberland said it looked forward to working with regulators to create clearer rules for the industry.

Meanwhile, Coinbase (NASDAQ:) has filed a Freedom of Information Act (FOIA) request seeking details on how much the SEC has spent on enforcement actions against crypto firms.