Cumberland Case Latest to be Dropped by SEC, Firm Says

The U.S. Securities and Exchange Commission (SEC) has agreed to drop its enforcement suit against Cumberland DRW, the crypto trading arm of Chicago-based trading firm DRW. The case, initially filed in October 2023, accused Cumberland of acting as an unregistered securities dealer and selling over $2 billion in unregistered securities, including tokens like Solana (SOL) and Polygon (POL). The SEC's decision to drop the lawsuit comes under the leadership of Acting Chair Mark Uyeda and reflects a broader shift in the agency's approach to cryptocurrency regulation.

Today we signed a joint filing to be made with the Securities and Exchange Commission (SEC) dismissing its case against Cumberland DRW. The filing was agreed in principle between Cumberland DRW and SEC staff on February 20 and is currently pending Commission approval. As a firm…

— Cumberland (@CumberlandSays) March 4, 2025

Cumberland DRW, led by CEO Don Wilson, had contested the SEC's accusations, arguing that the firm had attempted to register as a securities dealer with the SEC, only to face regulatory uncertainty under the previous leadership of Gary Gensler. Wilson criticized the SEC's "regulation by enforcement" approach, likening it to a selective and arbitrary enforcement of laws. The firm expressed relief in its announcement, emphasizing its commitment to transparency and a desire for clearer regulatory guidance to foster technological and financial innovation.

This decision to drop the Cumberland DRW case follows a series of similar moves by the SEC, which has recently dropped or closed investigations into several other crypto firms, including Coinbase, Kraken, ConsenSys, and others. In addition, the SEC has ended probes into major crypto companies such as Gemini, OpenSea, Robinhood Crypto, and Yuga Labs. The agency’s shift in stance reflects the growing recognition of the need for regulatory clarity and the importance of supporting innovation within the cryptocurrency sector.

Despite the positive developments, the SEC's decision is still subject to approval from a majority of the three commissioners currently on the panel. Cumberland DRW expressed optimism about continuing its dialogue with the SEC and working together to ensure that the U.S. remains a leader in global financial innovation. The dropped case is seen as a positive sign for the broader crypto industry, signaling a potential shift towards a more favorable regulatory environment.