Judge Rejects SEC’s Case Against DEBT Box and Orders $1.8M Fine

Twitter icon  •  Published 2 weeks ago  •  Nikolas Sargeant

The US District Court for the District of Utah dismissed the SEC's case against DEBT Box and levied fines exceeding $1.8 million on the regulatory body for acting in bad faith.

The fines encompass legal expenses and court fees. This penalty stems from the court's determination that the SEC deceived the judge to secure a temporary order in its favor.

In a filing dated May 28, Judge Robert Shelby granted the SEC's motion to dismiss the ongoing case without prejudice, allowing the agency to refile a related case in the same court before the same judge at a later date.

DEBT Box and its co-defendants contended that the case should be dismissed with prejudice to prevent the SEC from initiating further enforcement actions against the company.

Nevertheless, the company welcomed the ruling, viewing it as a favorable outcome. “This is a significant victory for us. It signifies that the SEC cannot continue with the case in its current form,” the firm stated on X.

DEBT Box Counters SEC’s $49M Fraud Allegations

The judge referenced a previous March ruling, stating that the SEC had acted in bad faith when obtaining a temporary asset freeze on DEBT Box. The company subsequently filed a lawsuit, alleging that the SEC's information was inaccurate, potentially leading to sanctions against the regulatory body.

In a lawsuit filed in July 2023, the SEC accused DEBT Box of orchestrating a fraudulent $49 million scheme involving the sale of "node licenses" promising returns from cryptocurrency mining. According to the SEC, these currencies were never mined, casting doubt on the legitimacy of the entire operation.

The DEBT Box case took an unexpected turn when the defendants challenged the SEC's accusations. The regulatory body had secured a temporary restraining order to freeze the crypto platform's assets, but the defendants accused the SEC of distorting facts to obtain it.

In response, Judge Robert Shelby demanded an explanation from the SEC regarding its conduct. Faced with scrutiny, the SEC's lawyers acknowledged errors but urged the judge not to impose formal sanctions.

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Author

Nikolas Sargeant

Nik is a content and public relations specialist with an ever-growing interest in Crypto. He has been published on several leading Crypto and blockchain based news sites. He is currently based in Spain, but hails from the Pacific Northwest in the US.