SEC Seeks Dismissal of Lawsuit Against Crypto Company Debt Box Amid Misrepresentation Claims
Summary:
The U.S. Securities and Exchange Commission (SEC) is pushing to dismiss a lawsuit against the crypto company, Debt Box, following a court order demanding clarification why the regulator should avoid penalties for alleged deception. The SEC supposedly misrepresented evidence related to a $720,000 transaction made within the U.S. The regulator previously accused Debt Box of conducting a fraudulent $50 million digital currency operation, freezing the company's assets and prompting its legal woes. Judge Robert J. Shelby is currently overseeing this ongoing case.
The U.S. financial watchdog is pushing to drop a legal action it started against a digital currency company, following a court ruling that it must clarify why it shouldn't face punishment for alleged falsehoods. In its official legal documents submitted on January 30 to a District Court in Utah, regarding its case against Debt Box, the U.S. Securities and Exchange Commission (SEC) expressed that it has concluded that dismissing this lawsuit without prejudice would be the most suitable course of action.
It further acknowledged that its legal team might not have provided sufficient information to the Court but insisted that this does not warrant any penalties. The SEC originally accused Debt Box of executing a deceptive digital currency operation worth $50 million in its capacity as a software mining license provider. Following such allegations, it obtained a restraining order in August to suspend Debt Box's operations after alleging that the firm has already moved $720,000 overseas, and would relocate to the United Arab Emirates, taking more concealed assets with them upon receiving the notice.
However, Judge Robert J. Shelby, supervising the case, reconsidered his initial ruling, finding that the SEC has misrepresented evidence and that the $720,000 transaction was actually conducted within the United States. In December, Judge Shelby issued a 'show cause order' to the SEC, compelling it to offer a justification or proof to the court. The SEC is currently urging the court to disregard Debt Box's petition for more penalties. According to the regulatory body, "a dismissal with prejudice" should only apply in instances of deliberate misconduct, denying any such misconduct has taken place.
Lawyers for Debt Box criticized the SEC in their motion to dismiss on December 4, suggesting that the agency has erred grossly in this case and that it should not be allowed to maintain a misleading narrative to ward off dismissal. The SEC declined to comment beyond its public court filings when contacted by Cointelegraph.
Concerns around what digital currency exchanges actually do with investor deposits remain a key discussion point.
Published At
1/31/2024 2:51:52 AM
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