DEBT Box urged the judge to file the lawsuit because the SEC ‘seriously mishandled’ the case.
DEBT Box and other defendants in a Securities and Exchange Commission lawsuit want the case dismissed after a court determined the agency lied to secure a temporary restraining order against them.
“The SEC misjudged this case. Attorneys for Digital Licensing Inc., which does business as DEBT Box, said they filed a motion to dismiss Dec. 4 with Utah federal court Judge Robert Shelby. “The SEC should not allow false stories to continue to be spread to avoid dismissals.”
The SEC obtained a temporary restraining order on freezing DEBT Box assets on August 3. It was claimed that if notified that an injunction would be imposed, the company would remove evidence and secretly move assets overseas.
The agency accused the company of perpetrating a $50 million cryptocurrency fraud scheme. DEBT Box sold software mining licenses tied to real-world assets that the SEC claimed were unregistered securities. Defendant disputes this claim.
“These claims are not only false but do not meet basic standards of defense,” he wrote in a recent motion.
A federal court in Utah on Nov. 30 reversed the asset freeze, saying the SEC misrepresented evidence by claiming DEBT Box had closed its bank accounts and was trying to escape the SEC’s jurisdiction by moving to the United Arab Emirates.
The court ruled that the company did not close its bank accounts and that $720,000 in transfers that the SEC said were sent overseas were actually sent domestically.
DEBT Box said the SEC is “misrepresenting the state of the law regarding cryptocurrency assets” through “fatally flawed claims.”
The SEC’s misrepresentations prompted Judge Shelby to issue a “show cause order” ordering the regulator to show why it should not be punished for its actions.
SEC’s ‘shocking’ actions should be punished, Ripple executives say
David Schwartz, Ripple’s chief technology officer, said the SEC’s actions were “shocking.”
“The SEC asked a judge for emergency orders to paralyze multiple companies and blatantly misrepresented the facts before the other side could defend itself,” he said in a December 5 X (Twitter) post.
Related: ‘We had to change our strategy,’ the SEC enforcement chief said of the latest actions.
Ripple advocate John Deaton wants regulators to force DEBT Box to pay for damages caused.
The Debt Box case is a great example of why Judge Netburn felt he had to do or say anything to advance his agenda and show the world that the SEC’s lawyers “lacked true loyalty to the law.”
At Debt Box, the SEC successfully obtained a temporary ban… https://t.co/Qr2jrOyb1J
— John E Deaton (@JohnEDeaton1) December 5, 2023
DEBT Box’s four principals (Jason Anderson, his brother Jacob Anderson, Schad Brannon and Roydon Nelson) and 13 others were included in the SEC’s action.
magazine: Cryptocurrency Regulation: Does SEC Chairman Gary Gensler have the final say?
