Court Rules in Favor of Plaintiff, Orders SEC to Pay $1.8 Million

US District Court Dismisses SEC’s Case Against DEBT Box

The US District Court for the District of Utah recently made a significant ruling regarding the case involving DEBT Box and the Securities and Exchange Commission (SEC). The court not only dismissed the SEC’s case but also imposed fines exceeding $1.8 million on the regulatory body for what was deemed as bad faith actions.

Key Points of the Ruling:

• The fines imposed cover legal fees and court costs.
• The court found that the SEC misled the judge to obtain a temporary order in its favor.
• Judge Robert Shelby approved the SEC’s request to dismiss the ongoing case without prejudice, allowing the agency to file a related case in the future.

DEBT Box and its co-defendants had advocated for the case to be dismissed with prejudice to prevent further enforcement actions by the SEC. Despite this, the company expressed satisfaction with the outcome of the ruling, considering it a favorable result.

In a previous ruling, the judge highlighted the SEC’s bad faith actions in obtaining a temporary freeze on DEBT Box’s assets, leading to the firm challenging the accuracy of the commission’s information.

Background of the Case:

In a lawsuit filed in July 2023, the SEC accused DEBT Box of running a fraudulent $49 million scheme related to the sale of “node licenses” promising profits from cryptocurrency mining. The SEC alleged that these profits were never generated, raising doubts about the legitimacy of the entire operation.

Following the SEC’s actions, the defendants contested the allegations, leading to a temporary restraining order on the crypto platform’s assets. The judge demanded an explanation from the SEC regarding its conduct, prompting the regulatory body’s attorneys to acknowledge errors while appealing against formal sanctions.