DEBT Box Case Dismissed by Judge, SEC Ordered to Pay $1.8M
In a surprising turn of events, the US District Court for the District of Utah has thrown out the Securities and Exchange Commission’s (SEC) case against DEBT Box. As a result of the SEC’s bad faith actions, the regulatory body has been ordered to pay fines exceeding $1.8 million to cover legal fees and court costs.
The court’s decision comes after it found that the SEC had misled the judge to obtain a temporary order in its favor. However, Judge Robert Shelby has approved 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 argued for the case to be dismissed with prejudice, preventing the SEC from taking further enforcement measures against the company. Despite this, DEBT Box expressed satisfaction with the ruling and considers it a favorable outcome.
“This is a significant win for us. It means that the SEC cannot proceed with the case as it stands,” the company stated.
The judge’s ruling is based on a previous decision in March, where it was determined that the SEC had acted in bad faith when obtaining a temporary freeze on DEBT Box’s assets. DEBT Box subsequently filed a lawsuit alleging that the SEC’s information was incorrect, potentially leading to sanctions against the regulatory body.
In the SEC’s original lawsuit filed in July 2023, it accused DEBT Box of operating a fraudulent $49 million scheme involving the sale of “node licenses” that promised profits from cryptocurrency mining. The SEC claims that these currencies were never actually mined, raising doubts about the legitimacy of the entire operation.
The DEBT Box case took an unexpected twist 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, but the defendants accused the SEC of distorting facts to obtain it.
In response to the defendants’ claims, Judge Robert Shelby demanded an explanation from the SEC regarding its actions. The SEC’s attorneys admitted to errors but urged the judge to refrain from imposing formal sanctions.
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