The Baseless Claims Of The Sec Became Evident: A Judge Warned
- Posted on December 3, 2023 2:44 AM
- Cryptocurrency Exchanges News
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The SEC had persuaded the court to freeze the assets of the company by claiming that DEBT Box had exceeded U.S. regulatory access and moved to Dubai.
United States District Judge Robert Shelby warned SEC attorneys about potential sanctions due to misleading statements in the case against the crypto company Digital Licensing Inc., also known as DEBT Box. The SEC claimed in the case, which took place in the Utah Federal Court, that DEBT Box defrauded investors of approximately $50 million through "node licenses" known as unregistered securities.
Judge Shelby's decision revealed inconsistencies in the SEC's statements during the case. Initially, SEC attorneys had persuaded the court to freeze the company's assets by asserting that DEBT Box had moved to Dubai. However, it later emerged that these claims were false, bank accounts were not closed, and the $720,000 overseas transfer allegation was domestic.
Expressing concerns about the behavior of SEC attorneys, Judge Shelby pointed out the risk of violating Federal Rule 11(b) due to inconsistencies in stating false facts and failing to correct these inaccuracies. The judge issued an instruction indicating that the SEC is at risk of penalties due to its baseless claims.
A TRM Labs report confirming the SEC's claim that DEBT Box deceived investors with mining tokens played a significant role in the case. While the defense attorney has not made a statement on the matter so far, the SEC accepted the court order by responding within the two-week period set by Judge Shelby.
This development is considered a turning point highlighting the complexity of crypto regulations and emphasizing the importance of legal responsibility in high-risk financial lawsuits. John Deaton, the attorney for the Ripple community, mentioned that it is not surprising for the SEC to personalize its approach in crypto cases and called for a court subpoena against the financial observer. Ripple's Chief Technology Officer, Stuart Alderoty, presented a detailed analysis of disturbing patterns related to the SEC.
