top of page
  • Capital Culture

The SEC Plans To Dismiss Lawsuit Against Crypto Firm Debt Box Following Court Threat Of Sanctions

According to a report from Unchained, recent news surrounding the U.S. Securities and Exchange Commission (SEC) has created quite a stir in the cryptocurrency industry. The regulatory body has been facing the possibility of sanctions after being accused of misleading the court in a lawsuit against crypto firm Debt Box.  

In a January 30th court filing with a Utah District Court, lawyers for the SEC said it recognized that its attorneys should have been more forthcoming with the court, but believes that the statements do not warrant sanctions.

The SEC had alleged that Debt Box had orchestrated a $49 fraudulent scheme and had teamed up with iX Global to promote its crypto asset. The Commission had frozen Debt Box's assets, claiming that the firm had sent $720,000 overseas to evade U.S. laws. However, the Judge overseeing the case, Robert Shelby, dissolved the initial order and concluded that the SEC's lawyers had made several "false and misleading" statements.

The Commission referenced a YouTube video as evidence, where Debt Box founder Jacob Anderson stated the company had “moved all operations to Abu Dhabi.”

However, the court later concluded that the company had not closed its users accounts, but the bank had actually done this, and Debt Box had transferred funds from the closed accounts to an account located in the United States. 

The SEC was then ordered by Judge Shelby to explain its statements in a “show cause order,” asking the regulator to argue why sanctions should not be imposed upon its lawyers. 

“The Commission takes very seriously the concerns expressed by the Court in the Order to Show Cause and has undertaken a process to provide the Court with a thorough response to the Court’s questions,” said the SEC in a December 7th statement.

The SEC now intends to dismiss the case without prejudice. However, Fox Business journalist Eleanor Terrett noted on X (formerly Twitter) that this doesn't necessarily mean the agency will escape scot-free.

“The judge could choose to impose monetary sanctions on the agency for misleading the court,” she said.

The move to dismiss the case without prejudice highlights the importance of transparency and accuracy in legal proceedings. The consequences of making misleading statements in court can be severe, as seen in this case. It also raises questions about the SEC's ability to regulate the cryptocurrency industry effectively.

1 view0 comments


bottom of page