March 27, 2024
Latest Cryptocurrency News

Debt Box Challenges SEC’s Attempt to Dismiss Enforcement Action

In a bold move, software firm Debt Box is urging a Utah federal judge to reject the United States Securities and Exchange Commission’s (SEC) motion to dismiss a contentious enforcement action against it. In a filing on February 14, Debt Box characterized the SEC’s move as a tactical maneuver to avoid potential sanctions and a permanent dismissal based on alleged misconduct.

The SEC had submitted a motion to dismiss the case on January 30, expressing its intent to scrutinize the evidence and understand the factors that may have led to inaccurate statements by its legal representatives. Debt Box contends that the SEC’s eagerness to dismiss the case without prejudice is a strategic ploy to escape sanctions and potentially initiate a revised enforcement action free from misconduct allegations.

“The SEC wants to exit this action under its own terms while retaining the option to re-file another enforcement action against the Debt Box defendants and other defendants at some undetermined time in the future, and perhaps in a different forum — as if nothing happened in this case, but something did happen in this case.”

Debt Box’s Filing Statement

Debt Box accuses the SEC of seeking special treatment in federal courts over the entities it regulates. It emphasizes the SEC’s dissatisfaction with promises to restructure teams or provide more ethics training when accused businesses mislead investors.

This development follows the SEC’s acknowledgment in late December 2023 of making inaccurate statements to the court earlier in the case. Judge Robert Shelby had criticized the SEC’s lawyers, directing the agency to clarify “false or misleading” statements regarding the company’s alleged attempt to relocate assets overseas to evade regulatory jurisdiction.

In response, the SEC changed its legal representation, committed to internal training, and sought a temporary dismissal for an internal review. Debt Box is urging the scheduled hearing on March 7 to proceed as planned, despite the SEC’s request for cancellation.

The case initially involved the SEC securing emergency measures against Debt Box, alleging the software firm defrauded investors of at least $50 million by selling unregistered securities in the form of software licenses claiming to mine digital assets linked to real-world industries. The SEC won a temporary restraining order on August 3, 2023, freezing Debt Box assets amid concerns about evidence removal and secret asset transfers overseas.

Image by Sergei Tokmakov, Esq. from Pixabay

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