Cumberland responds to SEC lawsuit: Will not change business operations or assets due to lawsuit, will firmly defend itself

After being sued by the U.S. SEC, digital asset market maker Cumberland responded in a statement: "Today, we have become the latest target of the U.S. SEC's enforcement-first approach to stifle innovation and prevent legitimate companies from engaging in digital assets. This is despite bipartisan opposition to this approach at a recent House Financial Services Committee hearing. At the hearing, the SEC was called a rogue agency, accused of failing to cooperate with Congress and abusing its power. In our case, the problem is that the SEC believes that some of our transactions involving certain crypto assets are securities transactions. At this point, we have been in good faith discussions with the SEC for five years. We have shared dozens of written summaries and statements, produced thousands of pages of materials, and had our senior management and compliance staff interviewed for a long time. Today's allegations are the first time that the SEC has outlined the specific transactions in dispute. The SEC claims that these transactions require us to register as a broker-dealer. Despite our strong opposition, we took this step and acquired a registered broker-dealer in 2019. It was not until then - despite Chairman Gensler's call to "come in and register" - that we were told that we could only use our own broker-dealers to trade BTC or ETH (both commodities and not subject to SEC jurisdiction). This naturally raises questions about whether the guidance to come in and register was provided in good faith. We will not make any changes to our business operations or the assets we provide liquidity for as a result of this SEC action. We are confident in our strong compliance framework and strict adherence to all known rules and regulations, even if they have been a moving target (ETH was claimed to be a security not long ago). We have previously demonstrated that the company is willing to protect itself from regulators exercising their power in a way that harms rather than benefits the market. We did this when Chairman Gensler was Chairman of the CFTC, and the court's charges against DRW were based solely on a 'flat earth' type conviction. This time, the SEC's approach seems to be a game of 'Catch-22', and the ability to 'come in and register' is just a mirage. We are ready to defend ourselves again. " Earlier news, the US SEC sued Cumberland DRW, claiming that it operated as an unregistered securities dealer. The indictment information shows that since March 2018, Cumberland has been buying and selling crypto assets as securities for its own account as an unregistered trader. It currently operates a crypto asset securitization business of more than $2 billion, violating the registration requirements of the U.S. federal securities laws designed to protect investors.