- SEC sued DEBT Box for allegedly defrauding investors out of $49 million through a cryptocurrency mining scheme
- SEC admitted to making false statements in court about DEBT Box trying to move assets overseas
- DEBT Box now asking judge to deny SEC’s request to dismiss and retry case, arguing SEC should face consequences for inaccurate statements
The Securities and Exchange Commission (SEC) sued Digital Licensing Inc, which does business as DEBT Box, last year over an alleged fraud scheme. Now, after the regulator admitted to making false statements in court, DEBT Box is asking a judge to deny the SEC’s request to dismiss and retry the case.
The SEC’s Lawsuit Against DEBT Box
The SEC filed a lawsuit against DEBT Box in 2022, accusing the company of defrauding thousands of investors out of at least $49 million. According to the SEC, DEBT Box offered customers “node licenses” to receive revenue from mining 11 different tokens.
The SEC’s Inaccurate Statements
During the case, Judge Robert Shelby criticized the SEC’s lawyers for making false and misleading statements. The SEC claimed DEBT Box was trying to move assets overseas to avoid the regulator’s jurisdiction. However, the SEC later admitted this wasn’t true.
Judge Shelby ordered the SEC to explain the inaccurate statements. The regulator said it “fell short of expectations to be accurate and candid” in court. The SEC assigned senior attorneys to take over the case and said it took measures to correct its mistakes.
DEBT Box Fights Back
After the SEC admitted to making false statements, the regulator moved to dismiss the case without prejudice last month. This would allow the SEC to refile the lawsuit in the future.
However, DEBT Box argues the SEC should face consequences for the inaccurate statements. The company said the SEC often punishes those it regulates for false statements.
DEBT Box asked the judge to deny the SEC’s request to dismiss and retry the case. The company also wants a hearing scheduled for March 7 to move forward as planned, despite the SEC’s request to cancel it.
This ongoing legal battle highlights issues around the SEC’s conduct in court. The regulator’s admission of false statements has now put its own credibility into question. DEBT Box aims to hold the SEC accountable for alleged hypocrisy in its lawsuit. The judge’s upcoming rulings will determine the next steps in this high-stakes case.
