The U.S. Securities and Exchange Commission announced Thursday that it has charged Cumberland DRW, a Chicago-based crypto trading firm, with various securities charges.

In an announcement, the SEC said that Cumberland operated as an unregistered dealer in handling more than $2 billion worth of cryptocurrencies. 

The complaint alleges that Cumberland traded “crypto assets that are offered and sold as investment contracts on third-party crypto asset exchanges.”

The SEC complaint mentions five assets that the regulator considers to be securities, including Solana, Polygon, Cosmos, Algorand, and Filecoin. The complaint notes, however, that it is a “non-exhaustive” list of such assets.

“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,” said Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit (CACU), in a statement.

“Cumberland profited from its dealer activity in these assets without providing investors and the market with the important protections afforded by registration,” Tenreiro added.

Cumberland did not immediately respond to Decrypt’s questions, but posted a statement on Twitter (aka X) that it wouldn’t be “making any changes to our business operations or the assets in which we provide liquidity” due to the lawsuit. 

“We’re ready to defend ourselves again,” it added, referring to a 2018 lawsuit from the Commodities and Futures Trading Commission against DRW, which the investment firm won.

Cumberland is the crypto trading subsidiary of Chicago-based investment firm DRW. It specializes in making institutional-sized markets in Bitcoin and other digital assets.

The SEC has hit a number of digital asset firms—including major American exchanges Coinbase and Kraken—with lawsuits for allegedly selling unregistered securities in the form of cryptocurrencies. 

But the approach has attracted the ire of those in the industry and some U.S. politicians, who claim the regulator and its Chair Gary Gensler have adopted a “regulation by enforcement” approach to watchdogging the industry.

Edited by Andrew Hayward

Editor’s note: This story was updated after publication with additional details.

Blockchain-based predictions platform Polymarket is seeking an additional $50 million in new capital amid potential plans to launch a token, The Information reported Monday.

Investors in the round will be issued token warrants, giving them the right to purchase tokens if Polymarket decides to launch them in the future, the outlet reported, citing anonymous sources.

It’s unclear whether the tokens will provide additional utility within the platform. Polymarket CEO Shayne Coplan did not immediately return a request for comment.

It follows the platform’s $70 million raise over two rounds this year, where it picked up $25 million in a Series A led by General Catalyst and an additional $45 million in Series B funding with participation from Ethereum co-founder Vitalik Buterin.

Polymarket has been riding high on U.S. election fervor this year, capturing nearly $1 billion in trade volume from those taking a punt on who will become the country’s 47th president.

Built atop the Ethereum and Polygon blockchain networks, Polymarket allows participants to buy and sell shares in different possible outcomes of real-world events. The price of one “share” in a prediction market ranges from $0.00 to $1, and its price correlates to its percentage chance of winning, or its “odds.”

While speculation on who will take the White House in November has helped fuel the platform’s recent surge in popularity, Polymarket also allows betting on pop culture, sporting, and other political events.

And traders are taking outsized bets this year, with total trading volume reaching its highest point on the platform last month, topping out at $472.8 million, according to one Dune dashboard.

Its popularity has led those within the Polymarket community to opine in recent weeks on the possibility of a token to help fund operations, as the platform does not currently charge users fees.

Traders have started altering their behavior in response to the speculation, attempting to artificially boost their trading volume in hopes of securing a larger airdrop reward, according to whales, or large traders, monitoring the activity, Decrypt previously reported.

Polygon Labs is making major strides toward the future of its network on Wednesday.

On September 4‌‌, the Ethereum scaling network will complete a migration from its longstanding MATIC token to POL, which will then become the native token of its network. The migration forms an integral part of the Polygon 2.0 roadmap.

Ahead of the shift, here’s a look at what to expect from the migration—and what you need to do if you’re a MATIC holder.

What is the “MATIC” to “POL” migration? 

The POL migration will phase out MATIC as Polygon’s native token. 

In lieu of MATIC, POL will become the native gas and staking token for Polygon’s main proof-of-stake chain, Polygon said in a July blog post.

Why is Polygon moving to POL?

The POL migration sets the groundwork for Polygon 2.0, the roadmap for Polygon’s evolution into a zero-knowledge Ethereum Virtual Machine (zkEVM) system, complete with its own network of interoperable application-specific blockchains. 

Per Polygon, POL will bring added utility to the network. As with MATIC, Polygon blockchain validators that participate in staking may earn rewards by restaking their POL to secure other chains in the Polygon supernet. 

In subsequent updates, POL will be employed to secure other blockchains within Polygon’s broader “aggregated” network, aka the “AggLayer,” which is a core component of Polygon 2.0. 

The AggLayer will aggregate zero-knowledge proofs from all connected chains and ensure the security of near-instant, atomic cross-chain transactions, Polygon explained in a blog post in January. 

Do users need to do anything before the POL migration? 

MATIC holders on the Polygon proof-of-stake chain do not need to do anything ahead of the POL migration, according to Polygon. Their tokens will be converted automatically to POL.

Meanwhile, MATIC holders on the Ethereum network may migrate their tokens to POL via the Polygon Portal Interface. 

MATIC holders on the Polygon zkEVM layer-2 network or centralized exchanges may also have to take some action to upgrade MATIC to POL, such as bridging them to Ethereum. An already-deployed migration contract is available to help holders switch from MATIC to POL on Ethereum in a permissionless manner. Polygon warns, however, that this process is for advanced users.

Finally, MATIC holders that hold MATIC as ERC-20 tokens in hardware wallets such as Ledger may need to manually convert to POL using their wallet, although Polygon has not yet detailed this process. 

When is the deadline for converting MATIC to POL?

There is currently no deadline for MATIC holders on Ethereum and Polygon zkEVM to convert MATIC to POL, per Polygon’s blog post. 

However, the Polygon community may be granted the authority to establish a deadline in the future, Polygon said in its post.