United States District Judge Robert Shelby of the U.S. District Court in Utah, has issued a warning against lawyers representing the Securities and Exchange Commission (SEC) over their false and misleading request in a crypto case that involved a Debt Box.
SEC Misleads Court in Debt Box Case
According to the order issued by the federal judge, the SEC’s legal team faces the possibility of being sanctioned for convincing the court to freeze the crypto firm’s assets with false arguments. For context, the agency told the court that Debt Box plans to transfer its assets and investors’ deposits overseas. This testimony led the court to freeze the company’s bank accounts.
Judge Shelby highlighted that the SEC’s “misrepresentations… undermined the integrity of the case’s proceedings,” and also caused Debt Box “irreparable harm.”
SEC Sues Debt Box For Securities Law Violation
The United States SEC has been at loggerheads with the Draper Utah-based entity for a few months now. Markedly, the regulator levied an enforcement action against Debt Box and four of its principals in July on the premise that the company intends to offer unregistered securities services called node licenses to U.S investors.
Jason Anderson, Jacob Anderson, Schad Brannon, and Roydon Nelson were all named as defendants in the case. Eventually, the accusations attracted a temporary asset freeze, a restraining order, and other emergency relief against DEBT Box and its executives. At the time, the crypto projects refuted the SEC accusation.
Judge Awaits SEC’s Lawyers Response
In the latest allegation put out by the SEC, Debt Box has also clarified that it has no plan of moving investors’ funds outside the United States nor did it plan to close its bank accounts before the SEC’s hearing. The court ended up dissolving the order when it found no grounds for the SEC’s accusation.
The SEC’s legal team has been given two weeks to respond to the judge’s finding that their argument against Debt Box was without facts and lacked context. There are generally concerns that the SEC may be targeting crypto firms, hence the reason for its baseless arguments in most cases. Cryptocurrency exchange Kraken is one of the latest firms to be charged with violation of securities laws.
The agency accused Kraken of illegally operating as a securities exchange as it failed to register with the appropriate authority.