The Securities and Exchange Commission sued the cryptocurrency unit of high-speed trading giant DRW Holdings, opening a new front in its war on crypto by going after a business that trades with hedge funds and other big market players.

The regulator alleged the company "bought and sold" crypto assets that were sold as securities, but did not register as a securities dealer.

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 US Securities and Exchange Commission has accused the cryptocurrency arm of Chicago-based proprietary trading giant DRW Holdings LLC of operating as an unregistered securities dealer in more than $2 billion of digital assets.

The SEC has charged Cumberland DRW with operating as an unregistered crypto dealer in over $2 billion transactions.

The U.S. Securities and Exchange Commission charged crypto market maker Cumberland DRW on Thursday with acting as an unregistered dealer for more than $2 billion in crypto assets, the agency said in a statement.

Cryptocurrency market maker Cumberland, a part of the trading firm DRW, reacted defiantly to a lawsuit from the U.S. Securities and Exchange Commission Thursday. Why it matters: The SEC's action against one of the longest standing providers of liquidity across trading venues in the digital assets markets is very different than the cases the agency has brought against fraudsters and market manipulators.

The SEC filed a lawsuit against Cumberland DRW for operating as an unregistered dealer in over $2B of crypto assets offered and sold as securities.