SEC Agrees To Drop Lawsuit Against Cumberland DRW

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Julia Smith

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Julia Smith

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Julia is an experienced editor with a passion for covering a wide variety of beats. She loves all things politics and regularly covers regulatory updates on emerging technology here for Crypto News.

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sec, cumberland drw, sec lawsuit

Key Takeaways:

  • Cumberland DRW reached an agreement with the SEC to formally end its lawsuit over allegations of operating as an unregistered dealer, though its finalization is still pending approval. .
  • Once approved, Cumberland DRW and the SEC’s joint filing officially ends the litigation against the crypto company after the regulator accused it of violating federal securities law.
  • The SEC recently dropped multiple lawsuits against major crypto firms like Kraken, Coinbase, and OpenSea, signalling a shift in its regulatory approach to crypto.

Cumberland DRW, the crypto trading branch of proprietary trading firm DRW, announced on Tuesday that it had reached an agreement with the United States Securities and Exchange Commission (SEC) to formally end the regulator’s lawsuit against it.

According to the March 4 announcement, Cumberland DRW revealed that it had signed a joint filing with the SEC set to formally end any litigation against the Chicago-based company.

The two parties agreed in principle to the deal on February 20, with the filing currently pending Commission approval.

“As a firm deeply committed to the principles of integrity and transparency, we look forward to continuing our dialogue with the SEC to help shape a future where technological advancements and regulatory clarity go hand in hand, ensuring that the U.S. remains at the forefront of global financial innovation,” the firm said in a statement.

The SEC Shifts Course

The SEC filed its complaint against Cumberland DRW back in October 2024 for allegedly violating U.S. securities law by operating as an unregistered dealer for more than $2 billion worth of crypto.

According to the lawsuit, the federal regulator was seeking disgorgement and civil penalties from the crypto company as a consequence for purportedly selling unregistered digital assets since 2018.

“We are not making any changes to our business operations or the assets in which we provide liquidity as a result of this action by the SEC,” Cumberland DRW said shortly after the litigation’s announcement.

“We are confident in our strong compliance framework and disciplined adherence to all known rules and regulations – even as they have been a moving target (it wasn’t long ago ETH was claimed to be a security),” the organization added.

The SEC garnered flack in recent years for its regulation-by-enforcement approach to the digital asset industry under former Chair Gary Gensler.

However, the federal agency has since dropped several lawsuits against key players in the crypto sector in recent weeks, including Kraken, Coinbase, OpenSea, and more.

The SEC’s decision to rescind the lawsuit against Cumberland DRW symbolizes its continued shift toward digital asset regulation in the U.S.

Frequently Asked Questions (FAQs)

What was the lawsuit between Cumberland DRW and the SEC about?

The SEC sued Cumberland DRW in October 2024, alleging that the firm operated as an unregistered dealer while facilitating over $2 billion in crypto transactions.

What does this mean for crypto regulation in the United States?

The resolution of high-profile cases like this suggests ongoing regulatory adjustments, with firms pushing for clearer compliance guidelines amid evolving SEC policies.

When did Cumberland DRW and the SEC reach a settlement?

The two parties agreed in principle to the settlement on February 20, 2025, with a formal filing announced on March 4, pending SEC approval.

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