The U.S. Securities and Exchange Commission announced Thursday that it has charged Cumberland DRW, a Chicago-based crypto trading firm, with various securities charges.

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 Solana, Polygon, Cosmos, Algorand, and Filecoin. The complaint notes, however, that it is a “non-exhaustive” list of such assets.

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“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 Decrypt’s questions, but posted a statement on Twitter (aka X) that it wouldn’t be “making any changes to our business operations or the assets in which we provide liquidity” due to the lawsuit. 

“We’re ready to defend ourselves again,” it added, referring to a 2018 lawsuit from the Commodities and Futures Trading Commission against DRW, which the investment firm won.

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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 Coinbase and Kraken—with lawsuits for allegedly selling unregistered securities in the form of cryptocurrencies. 

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 Hayward

Editor's note: This story was updated after publication with additional details.

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