The US Securities and Exchange Commission (SEC) filed a lawsuit in the District Court for the Northern District of Illinois against Cumberland DRW LLC, accusing it of failing to register as a broker-dealer.

According to the regulator’s complaint, Cumberland DRW bought and sold cryptocurrencies as part of its normal business, violating the Exchange Act of 1934. The lawsuit states that Cumberland publicly describes itself as “one of the world’s leading providers of liquidity” in crypto assets and operates around the clock, trading with counterparties over the phone or through its Marea online trading platform.

The department demanded a permanent injunction on the platform’s operation with crypto assets, the return of illegally obtained proceeds from operations amounting to more than $2 billion, payment of interest until a court decision is made, and the imposition of an administrative fine.

The SEC’s Acting Chief of the Cryptocurrency and Cybersecurity Division, Jorge G. Tenreiro, said that the company itself, crypto asset issuers and objective investors should have considered the offering and sale of crypto assets on the Cumberland platform as an investment in securities. Cumberland profited from its dealership activities without providing investors and the market with the protections afforded by registration, Tenreiro said.

“There is a lot of protest in the crypto industry that cryptocurrencies are more like commodities than securities. However, federal securities laws require all dealers to register with the SEC, and crypto asset platforms are no exception,” Tenreiro said.

In 2020, the SEC accused another trading platform, Robinhood, of hiding information from users and ordered the company to pay a fine of $65 million. In September, Robinhood entered into a settlement with California prosecutors, agreeing to pay $3.9 million for violating consumer rights.