SEC Ordered to Pay $1.8M After Judge Dismisses DEBT Box Case
The US District Court for the District of Utah made a ruling on Tuesday, throwing out the Securities and Exchange Commission’s (SEC) case against DEBT Box and ordering the regulatory body to pay fines exceeding $1.8 million for its deceptive actions. These fines include legal fees and court costs. The court found that the SEC had misled the judge in order to obtain a temporary order in its favor.
As part of the same filing on May 28, Judge Robert Shelby granted the SEC’s request to dismiss the ongoing case without prejudice, allowing the agency to file a related case in the same court at a later time. DEBT Box and its co-defendants had argued for a dismissal with prejudice to prevent the SEC from taking further enforcement actions against the company. Nevertheless, the company expressed satisfaction with the ruling, considering it a positive outcome.
“This is a significant victory for us. It means that the SEC cannot proceed with the case as it currently stands,” the firm stated on X.
DEBT Box Challenges SEC’s $49M Fraud Allegations
The judge referenced a previous ruling in March which stated that the SEC had acted in bad faith when obtaining a temporary freeze on DEBT Box’s assets. The company subsequently filed a lawsuit, claiming that the SEC’s information was inaccurate and could result in sanctions against the regulatory body.
In a lawsuit filed in July 2023, the SEC alleged that DEBT Box had engaged in a fraudulent scheme, selling “node licenses” that promised profits from cryptocurrency mining. The SEC asserted that these currencies were never mined, raising doubts about the legitimacy of the entire operation.
The DEBT Box case took an unexpected turn when the defendants disputed the SEC’s allegations. The regulatory body had obtained a temporary restraining order to freeze the assets of the crypto platform. However, the defendants accused the SEC of distorting the facts to obtain it.
In response, Judge Robert Shelby demanded an explanation from the SEC regarding its actions. Faced with scrutiny, the SEC’s attorneys acknowledged their mistakes but urged the judge not to impose formal sanctions.
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