The US District Court for the District of Utah made a significant decision on Tuesday, dismissing the SEC’s case against DEBT Box and issuing fines surpassing $1.8 million against the regulatory body for its questionable actions.
These fines encompass legal expenses and court fees. The court’s ruling stemmed from its determination that the SEC had deceived the judge to secure a temporary order in its favor.
In the same filing on May 28, Judge Robert Shelby granted the SEC’s plea to close the ongoing case without prejudice, allowing the agency to potentially file a related case in the future before the same judge in the same court.
DEBT Box and its co-defendants contended that the case should be dismissed with prejudice to prevent the SEC from launching further enforcement actions against the company. Nevertheless, the company expressed contentment with the verdict, viewing it as a favorable outcome.
“This represents a significant victory for us. It indicates that the SEC cannot advance with the current case,” the company stated on X.
Debt Box Challenges SEC’s $49M Fraud Case
Citing a previous ruling from March, the judge highlighted the SEC’s actions in obtaining a temporary freeze on DEBT Box’s assets as evidence of bad faith. Subsequently, the firm challenged the accuracy of the commission’s information, raising the possibility of sanctions against the SEC.
In a lawsuit filed in July 2023, the SEC accused DEBT Box of orchestrating a fraudulent scheme worth $49 million, involving the sale of “node licenses” promising profits from cryptocurrency mining. The SEC asserted that 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 contested the SEC’s allegations, alleging that the regulatory body had distorted facts to secure a temporary restraining order freezing the assets of the crypto platform.
In response to the defendants’ accusations, Judge Robert Shelby demanded clarification from the SEC regarding its actions. Faced with scrutiny, the SEC’s attorneys acknowledged errors but urged the judge not to impose formal sanctions.
