The U.S. Securities and Exchange Commission (SEC) is suing Chicago-based crypto trading firm Cumberland for allegedly operating as an unregistered securities dealer in transactions involving more than $2 billion worth of crypto assets.

The complaint alleges that since March 2018, Cumberland has been buying and selling crypto assets offered and sold as securities as part of its regular business, which violates the registration requirements of federal securities laws.

The SEC says Cumberland, which publicly claims to be one of the world’s leading liquidity providers in crypto, trades digital assets with counterparties by phone or through its online trading platform Marea. The company also allegedly engages in trading crypto securities on third-party exchanges, according to the regulator.

Says Jorge G. Tenreiro, acting chief of the SEC’s Crypto Assets and Cyber Unit (CACU),

“Despite frequent protestations by the industry that sales of crypto assets are all akin to sales of commodities, our complaint alleges that Cumberland, the respective issuers, and objective investors treated the offer and sale of the crypto assets at issue in this case as investments in securities, and Cumberland profited from its dealer activity in these assets without providing investors and the market with the important protections afforded by registration.”

In a statement, Cumberland says it has become the latest target of SEC’s enforcement-first approach, but says it is ready to defend itself from the accusations.

“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. 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).”

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