SEC admits it made inaccurate statements in Utah cryptocurrency case
The Securities and Exchange Commission acknowledged making inaccurate statements in its lawsuit against cryptocurrency startup DEBT Box, but the regulator insisted the company’s assets should still be frozen.
In November, Utah’s top federal judge criticize SEC attorneys asked that the company provide a basis for its request for an injunction to freeze DEBT Box assets over its handling of the case.
Judge Robert J. Shelby ordered the SEC to account for “false or misleading” statements after the company alleged it was trying to move assets overseas to escape regulators’ jurisdiction.
In its response to the court Thursday, the SEC acknowledged that it misstated some of the accusations it made to support its request for an injunction, including that DEBT Box reportedly closed dozens of accounts during ongoing litigation.
The SEC “lacked” the expectation to be accurate and candid in court, made inaccurate statements, failed to self-correct, and “made it clear that certain statements were inferences from the facts rather than directly supporting factual claims .” he said. said in the answer.
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But the agency argued it acted in good faith and properly requested an injunction.
The SEC said it has taken steps to correct its mistakes, including assigning a senior attorney from the commission’s Denver regional office to oversee the case going forward. The SEC’s Enforcement Division will also provide mandatory training for employees on “their obligations to be accurate and candid, and to correct inaccuracies as soon as they come to light.”
The lawsuit alleges that DEBT Box defrauded thousands of investors out of a total of $49 million. DEBT Box offered its customers so-called “node licenses” that allowed them to profit from mining without running actual mining operations.
According to the SEC, DEBT Box misrepresented that it was actually conducting business. Regulators said DEBT Box attempted to move assets overseas to escape regulators’ jurisdiction and impede the SEC’s investigation.
The commission obtained an injunction earlier this year, but was disbanded in October after a court found the SEC did not sufficiently support its claims.
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