United States District Judge Robert Shelby has warned Securities and Exchange Commission (SEC) lawyers of alleged misleading statements in legal action against Digital Licensing Inc., also known as DEBT Box, a crypto company. The reason indicated is possible restrictions.
The SEC’s legal action was filed in federal court in Utah. alleged DEBT Box defrauded investors of approximately $50 million through the vending of unregistered securities known as “node licenses”.
Judge Shelby’s decision revealed notable inconsistencies in the SEC’s case. Initially, the SEC, led by attorney Michael Welsh, had convinced the court to seize the assets of DEBT BoxArguing that the company was moving to Dubai beyond US regulatory reach. Subsequently, it was revealed that these claims were false, no bank accounts had been closed and the alleged foreign transfer of $720,000 was domestic.
The judge expressed concerns regarding the behavior of SEC lawyers. The misrepresentation of facts and the failure of other team members to correct these inaccuracies may have violated Federal Court Rule 11(b), which mandates evidence-supported factual claims. This resulted in an “Order to Show Cause” being issued by Shelby, requiring the SEC to show cause why they should not impose penalties for these actions.
The complexity of the case is underlined by the TRM Labs report that corroborates the SEC’s primary claim that DEBT Box defrauded investors with respect to mining tokens. Defense counsel have not made any statement on the issue, and the SEC has accepted the order, planning to respond within the two-week deadline specified by Judge Shelby.
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This milestone marks a significant moment in the legal process, highlighting the complexities of cryptocurrency regulation and underscoring the importance of legal responsibility in high-stakes financial litigation.
Ripple lawyer John E. Deaton They say He’s not surprised the financial regulator has been caught lying, saying, “It appears that SEC lawyers have made it personal when it comes to crypto matters.” Along with this, he has demanded summons against the financial monitoring institution. His colleague, Ripple’s Chief Technology Officer Stuart Alderotti, has also listed Detailed analysis of troubling patterns observed with SEC.
