The U.S. Securities and Exchange Commission (SEC) said Cumberland DRW was an unregistered securities dealer in a lawsuit Thursday, alleging the crypto market maker "bought and sold" cryptocurrencies that were sold as unregistered securities.

The SEC alleged that Cumberland used its research reports and update emails to promote investments in different cryptocurrencies, naming Polygon's {{POL}} (formerly MATIC), Solana's {{SOL}}, Cosmos' {{ATOM}}, Algorand's {{ALGO}} and Filecoin's {{FIL}} as "a non-exhaustive list" of cryptos that were sold as securities.

"Public statements by the issuers and promoters of the Cumberland-Traded Assets – including statements retransmitted by Cumberland and by the third-party crypto asset trading platforms that Cumberland uses – would have led objective investors to reasonably view the offer to purchase or sell of each of the Cumberland-Traded Assets as offers to purchase and sell investment contracts, which are securities pursuant to the federal securities laws," the SEC's complaint said.

These investors expected to profit, the SEC alleged.

However, Cumberland did not register as a securities dealer.

The SEC, as it has in a few previous suits, went through the five example cryptocurrencies and laid out its arguments for how these assets look like securities, pointing to public statements from the projects' founders and white papers and Cumberland's own statements about the different assets.

As one example, the SEC alleged, Cumberland promoted ATOM through, "An email sent to counterparties on February 20, 2023 stated: 'At the moment, one of the smaller gainers in the sector, outside of ETH and EOS, has been ATOM. ATOM is up ‘only’ 53% YTD, despite strong fundamentals and a healthy developer community; it’s a name where we expect to see a catchup rally if crypto remain buoyant.'"

The SEC is seeking a permanent injunction and disgorgement of proceeds, the suit said.

However, Cumberland pushed back against the suit on a social media post on X. "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)," the post said.