The Securities and Exchange Commission (SEC) in the United States has accused cryptocurrency market maker Cumberland of engaging in unregistered trading activities.
According to the SEC, Cumberland has been involved in the buying and selling of digital assets without the required registration since March 2018. Despite calls from SEC Chairman Gary Gensler for cryptocurrency companies to register, Cumberland allegedly disregarded regulatory obligations.
The SEC asserts that Cumberland, whose broker-dealer status was inactive and not authorized for crypto transactions, continued to operate within the cryptocurrency market unlawfully.
This move against Cumberland by the SEC is part of a broader effort by the regulatory body to enhance supervision over the American cryptocurrency market. The SEC has been closely monitoring compliance with securities regulations by crypto enterprises, particularly those operating without the appropriate licenses.
Increased Regulatory Focus on the Crypto Sector by the SEC
The SEC’s enforcement actions against Cumberland are occurring amidst a wave of regulatory measures aimed at the cryptocurrency industry. Recently, the SEC has taken decisive actions to curb unregistered operations within the sector.
Earlier this year, the agency filed charges against the cryptocurrency exchange Bittrex for allegedly not registering as a broker, clearing agency, or exchange.
In a similar vein, a lawsuit was brought against Coinbase by the SEC, alleging unregistered broker and exchange activities. Gensler highlighted the necessity for all crypto entities engaging in securities-related operations to comply with registration obligations.
These regulatory maneuvers form part of the SEC’s strategy to establish oversight over the U.S. cryptocurrency market. While the agency’s approach has generated concerns within the crypto community, many industry leaders argue that the SEC’s strict enforcement hampers innovation and might drive crypto ventures abroad.
Nevertheless, the SEC underscores that its interventions are vital to safeguard investors and ensure that digital assets adhere to the same standards as traditional financial products.