SEC moves to drop lawsuit against Cumberland DRW

The U.S. Securities and Exchange Commission (SEC) has agreed to dismiss its lawsuit against Chicago-based crypto trading firm Cumberland DRW, according to a statement from the firm.

"Today we signed a joint filing to be made with the Securities and Exchange Commission (SEC) dismissing its case against Cumberland DRW," the company said in a March 4 post on X.

Cumberland stated that the filing was agreed upon in principle with SEC staff on February 20 and is awaiting final approval from the agency.

The SEC initially sued Cumberland DRW on October 10, alleging that it operated as an unregistered securities dealer while handling over $2 billion in crypto assets.

The agency claimed that since March 2018, Cumberland had acted as an unregistered dealer by trading digital assets that the SEC considered securities, including Polygon (CRYPTO:MATIC), Solana (CRYPTO:SOL), Cosmos (CRYPTO:ATOM), Algorand (CRYPTO:ALGO), and Filecoin (CRYPTO:FIL).

The lawsuit sought permanent injunctive relief, disgorgement of alleged ill-gotten gains, prejudgment interest, and civil penalties.

Cumberland maintained that it had registered as a broker-dealer in 2019 and had engaged in five years of discussions with the SEC before facing the lawsuit.

The firm described the action as part of the SEC’s "enforcement-first approach to stifling innovation."

The dismissal marks another instance of the SEC dropping legal action against crypto-related firms.

The regulator recently withdrew lawsuits against crypto exchanges Coinbase and Kraken, as well as blockchain software company Consensys.

Additionally, investigations into NFT firms Yuga Labs and OpenSea, along with exchanges Gemini and Uniswap Labs, have been closed.

Cumberland stated that it looks forward to continuing discussions with the SEC to ensure that regulatory frameworks align with technological advancements.